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Abstract
We investigate the role of coworkers in shaping job mobility decisions by altering perceived outside options. Leveraging novel survey data administered to a representative sample of wage and salaried workers in the US, we identify two key channels through which current and former coworkers influence workers’ decisions to switch jobs or industries. First, having more current coworkers with prior experience in an industry improves the accuracy of wage beliefs for that industry, as supported by an analysis of perceived wages and coworker composition. Second, having more past coworkers currently employed at a firm increases the perceived likelihood of receiving a job offer from that firm, as evidenced by a survey experiment eliciting job offer probabilities for hypothetical jobs. We investigate the welfare implications of these results in a job choice model that incorporates these coworker effects, departing from traditional models that assume perfect information about wages and job-offer probabilities.