Connecting the Young: High School Graduates’ Matching to First Jobs in Booms and Great Recessions

Abstract Using Swedish economy-wide data, we examine the relationship between business cycle conditions and the use of social contacts in the process where young workers are matched to their first real jobs. We measure social contacts acquired during paid work during high school, and we rely on interacted class-establishment fixed-effects models to isolate the effects of interest. One third of post-graduation matches are formed at establishments where youths worked during their studies. Graduates are much more likely to match with sites to which adult co-workers from these jobs have relocated. The importance of these job-finding channels is strongly counter-cyclical for young labour market entrants.