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Abstract
How do coworker networks shape workers’ perceived outside options and sectoral mobility? To answer this question, we design and implement a survey with 2,721 full-time U.S. wage-and-salary workers ages 25–60, reweighted to CPS benchmarks. Stronger coworker ties to a destination sector are associated with more accurate beliefs about wages in that sector, higher perceived probabilities of receiving an offer, and greater intentions to apply. In the conjoint experiment, connection with a former coworker at the hiring firm raises the probability that workers perceive to receive an offer from that firm by the most compared to all other job attributes. Using these empirical findings, we calibrate a partial-equilibrium sector-choice model under past and current coworker influence. The two channels work in opposite directions: coworker-provided wage information improves the allocation of workers across sectors, whereas coworker-linked perceived access tilts applications toward destinations paying closer to what workers already earn. Measured on wages, the two effects are comparable in size, so that neither the reduced-form estimates nor their sum reveals the net consequence of coworker networks. Correcting cross-sector wage misperceptions entirely would be worth 2.23 percent of permanent consumption, and coworker-provided information accounts for approximately 3 percent of that gain. Because what matters is the direction of ties rather than their number, redirecting the networks of the lowest-paying sectors toward higher-paying destinations, without adding any connections, is worth roughly six times as much as broadening them.