Research | Sheng Shuyang: Party On: The Labor Market Returns to Social Networks in Adolescence

Release time：04 March 2026

What determines your income? Besides formal education, friendships during adolescence might be more important than you think. Traditional economic research focuses on the impact of investments in cognitive skills, such as education, on labor market returns. While the impact of social skills on personal growth has received attention, empirical evidence regarding the causal effect of social networks formed during adolescence on labor market outcomes remains scarce.

A collaborative study titled Party On: The Labor Market Returns to Social Networks in Adolescence by Professor Sheng Shuyang from the School of Management and Economics (SME) at The Chinese University of Hong Kong, Shenzhen (CUHK-Shenzhen); Professor Adriana Lleras-Muney from the University of California, Los Angeles; Matthew Miller from Audible; and Professor Veronica Sovero from the University of California, Riverside indicates that each additional friend during adolescence significantly increases income in adulthood by 7% to 14%, an effect comparable to the return of one extra year of education. This study provides the first rigorous evidence for the causal effect of the number of adolescent friends on adult labor income, confirming the independent role of social capital in human capital formation. Furthermore, the results emphasize the importance of social activities in schooling, providing a significant reference for policymakers and educators.

The research paper was published in the Journal of Labor Economics, a top-tier international journal in labor economics.