Children Working at the Same Employer as Their Parents Saw Persistent Increases in Earnings

Parents help their children with many things, but to what extent do they help them find a job?

Working for a parent’s employer leads to a 24% increase in earnings at a young worker’s first job compared to those hired without a parental connection. Three years later, individuals who began their careers where their parents work earned 20% more than their peers who did not.

A job with a parent’s employer can pay off and the advantage grows with the parent’s earnings.

Matthew Staiger, a Harvard Opportunity Insights researcher, used data from the U.S. Census Bureau’s Longitudinal Employer-Household Dynamics program and 2000 Decennial Census to reveal how workers can benefit from their parents’ employment connections.

The Census Bureau and Harvard University have collaborated through Harvard’s Opportunity Insights, which uses Census Bureau data to study economic mobility including the creation of the Opportunity Atlas.

Staiger presented his research at a Census Bureau webinar in August, 2024. He used the data to create a sample of 48 million people who lived with a parent, graduated high school between 2000 and 2013, and resided in a state that reported LEHD data at least two years prior to their graduation.

Among his findings: parents’ employment connections can help their children earn higher wages throughout their careers whether the parents run the company or simply work there.

“Intergenerational persistence in earnings is attributable, in part, to parents using their connections to provide access to higher paying firms,” Staiger said in the webinar. “Social networks, more broadly defined, could actually be quite an important determinant of intergenerational mobility.”

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