In the United States, it is not uncommon for individuals to find jobs through their parental connections. Five percent of people in the sample got their first job at the same firm where a parent was employed. By age 30, 29% of sampled individuals had done so.

A job with a parent’s employer can pay off and the advantage grows with the parent’s earnings. Children of parents in the top 40% of earners experienced gains more than two times greater than those with parents in the bottom 40%.

The increase in earnings largely stemmed from parents providing access to higher paying blue-collar jobs for their children who otherwise likely would have worked in the “unskilled” service sector (Figure 1).

Parents provided access to firms that paid higher wages rather than to high-paying jobs within those firms, proving the proverb, “it’s all about who you know.”

The more a parent earned, the more likely their children were to work for the same employer.

Nearly a third (31%) of individuals whose parents were in the top 10% of earners worked for a parent’s employer at some point between ages 16 and 30, compared to 25% in the bottom 10% of earners.

But can only “big wigs” land jobs for their kids?

Of sampled individuals who worked for a parent’s employer, only 19% had a parent in the top 1% of earners within their firm, suggesting that many of these parents were themselves employees rather than owners or top executives.

Although most parents who worked for the same employer as their kids were not top earners, those who were helped their children most. Children of top earners were more likely to get a job with their parent’s employer and experience larger earnings gains than peers in the sample who did not.

One explanation is that higher-earning parents are more likely to hold positions of authority at their firms.

The relationship between the probability of working for a parent’s employer and parental earnings tracked closely to the probability that the parents were among their firm’s top earners (Figure 2).

Access to a parent’s employer can shape early-career outcomes and intergenerational mobility.

“The headline finding … is that these connections explain a modest, but not insignificant, share of the correlation between the income of parents and children,” Staiger said. “However, parents may be able to provide access to jobs outside of their own place of work” through extended family, friends, or co-workers.

This raises the possibility that parental connections play an important role in shaping economic opportunity.

Even workers recently laid off benefited from parental employment connections: Those who joined their parent’s employer got access to higher-paying firms and earned 23% more after being displaced than those who found jobs without a parental connection.

Education played a role as well. Children without a college degree were twice as likely as their college-educated siblings to work for their parents’ employer.

Staiger’s research suggests parental employment connections may be a key driver of socioeconomic mobility, particularly since many jobseekers find employment through social contacts.

“These connections appear to benefit white males from high-income families the most,” Staiger said.

The bottom line: Understanding the parent-employment connection might help workers navigate the labor market more successfully.