Navigating bias? An assessment of access to, use of, and returns to social capital in the school-to-work transition of descendants of immigrants

Research in several advanced economies has found that the descendants of immigrants tend to experience persistent difficulties in entering the labour market. This article tests whether social capital contributes to the disadvantage of descendants of immigrants in the school-to-work transition when compared to their native-background peers in Sweden. The study uses the CILS4EU survey, which provides information on friendship ties measured at age 15 and labour market outcomes at age 19. This allows for an analysis of networks formed before labour market entrance, an extensive control setup, and a comparison of measures of outgoing, incoming, and reciprocated friendship ties. The results show that the descendants of immigrants have access to less social capital measured as employed friends, but that they are as likely as natives to use their contacts to obtain a job. The returns to social capital are similar in terms of unemployment risk, but descendants of immigrants have a lower payoff when it comes to earnings. The study concludes that social capital contributes to, but is not the main driver of their labour market disadvantage in the school-to-work transition.