Job Information Networks, Neighborhood Effects, and Inequality
01 Nov 2004-Journal of Economic Literature (American Economic Association)-Vol. 42, Iss: 4, pp 1056-1093
TL;DR: In this article, the authors explore the theoretical and empirical literature to examine the use by different social groups of informal sources of information provided by friends, relatives, and acquaintances during job search and its consequences for the job market.
Abstract: This paper explores the theoretical and empirical literature to examine the use by different social groups of informal sources of information provided by friends, relatives, and acquaintances during job search and its consequences for the job market. It also addresses the role of network structure and size, the resource endowments of contacts, and nature of the links between contacts to explain differences in the effects of job information networks. In doing so, the paper also turns to the sociology literature on job information networks and provides an economic perspective on such sociological concepts as strong versus weak ties, inbreeding, distance from structural holes, etc. The paper distinguishes between models of exogenous job information networks, that is where individuals obtain job-related information through a given social structure, and endogenous job information networks, which are social networks that result from individuals' uncoordinated actions. The paper pays special attention to such issues as physical and social proximity and sharing of information and discusses them in the context of the recent social interactions and neighborhood effects literature. Finally, the paper outlines a model that integrates job information networks, where interactions occur in business cycle frequencies, with the dynamics of human capital formation, which include the joint effects of parental, community and neighborhood human capital, and are set in life cycle frequencies, for the purpose of organizing suggestions for future research and examining earned income inequality.
Citations
More filters
Posted Content•
TL;DR: In this article, the authors introduce the concept of ''search'' where a buyer wanting to get a better price, is forced to question sellers, and deal with various aspects of finding the necessary information.
Abstract: The author systematically examines one of the important issues of information — establishing the market price. He introduces the concept of «search» — where a buyer wanting to get a better price, is forced to question sellers. The article deals with various aspects of finding the necessary information.
3,790 citations
TL;DR: The authors developed a model of friendship formation that sheds light on segregation patterns observed in social and economic networks Individuals have types and see type-dependent benefits from friendships, and examine the properties of a steady-state equilibrium of a matching process of friendship forming.
Abstract: We develop a model of friendship formation that sheds light on segregation patterns observed in social and economic networks Individuals have types and see type-dependent benefits from friendships We examine the properties of a steady-state equilibrium of a matching process of friendship formation We use the model to understand three empirical patterns of friendship formation: (i) larger groups tend to form more same-type ties and fewer other-type ties than small groups, (ii) larger groups form more ties per capita, and (iii) all groups are biased towards same-type relative to demographics, with the most extreme bias coming from middle-sized groups We show how these empirical observations can be generated by biases in preferences and biases in meetings We also illustrate some welfare implications of the model
853 citations
TL;DR: This work introduces a social network and assumes that agents can only observe the actions of agents to whom they are connected by this network, and allows agents to choose a different action at each date.
701 citations
TL;DR: The main theorem shows that when the probability that each individual observes some other individual from the recent past converges to one as the social network becomes large, unbounded private beliefs are sufficient to ensure asymptotic learning.
Abstract: We study the (perfect Bayesian) equilibrium of a sequential learning model over a general social network. Each individual receives a signal about the underlying state of the world, observes the past actions of a stochastically generated neighbourhood of individuals, and chooses one of two possible actions. The stochastic process generating the neighbourhoods defines the network topology. We characterize pure strategy equilibria for arbitrary stochastic and deterministic social networks and characterize the conditions under which there will be asymptotic learning—convergence (in probability) to the right action as the social network becomes large. We show that when private beliefs are unbounded (meaning that the implied likelihood ratios are unbounded), there will be asymptotic learning as long as there is some minimal amount of “expansion in observations”. We also characterize conditions under which there will be asymptotic learning when private beliefs are bounded.
678 citations
01 Jan 2012
TL;DR: In this article, a list of 15 potential causal pathways which may lead to neighbourhood effects is given, grouped into four categories: social-interactive mechanisms, environmental mechanisms, geographical mechanisms, and institutional mechanisms.
Abstract: Although there is now a large body of empirical research on neighbourhood effects, we know relatively little about the causal mechanisms responsible for relationships between neighbourhood attributes and individual outcomes. A list of 15 potential causal pathways which may lead to neighbourhood effects is given, grouped into four categories: social-interactive mechanisms, environmental mechanisms, geographical mechanisms, and institutional mechanisms. The ultimate goal of neighbourhood effects research is not only to identify which mechanisms are responsible for neighbourhood effects, but also to quantitatively ascertain their relative contributions to the outcome under investigation. A pharmacological metaphor of “dosage-response” is used to understand how the theoretical mechanisms could be causally linked to individual outcomes. This metaphor refers to questions regarding the composition and the administration of the neighbourhood dosage, and the neighbourhood dosage-response relationship. This chapter concludes that despite the ever growing literature on neighbourhood effects, there is far too little scholarship to make many claims about which causal links dominate for which outcomes for which people in which national contexts and any conclusions on the existence of such effects should be treated as provisional at best.
640 citations
References
More filters
TL;DR: In this paper, it is argued that the degree of overlap of two individuals' friendship networks varies directly with the strength of their tie to one another, and the impact of this principle on diffusion of influence and information, mobility opportunity, and community organization is explored.
Abstract: Analysis of social networks is suggested as a tool for linking micro and macro levels of sociological theory. The procedure is illustrated by elaboration of the macro implications of one aspect of small-scale interaction: the strength of dyadic ties. It is argued that the degree of overlap of two individuals' friendship networks varies directly with the strength of their tie to one another. The impact of this principle on diffusion of influence and information, mobility opportunity, and community organization is explored. Stress is laid on the cohesive power of weak ties. Most network models deal, implicitly, with strong ties, thus confining their applicability to small, well-defined groups. Emphasis on weak ties lends itself to discussion of relations between groups and to analysis of segments of social structure not easily defined in terms of primary groups.
37,560 citations
TL;DR: Developments in this field are reviewed, including such concepts as the small-world effect, degree distributions, clustering, network correlations, random graph models, models of network growth and preferential attachment, and dynamical processes taking place on networks.
Abstract: Inspired by empirical studies of networked systems such as the Internet, social networks, and biological networks, researchers have in recent years developed a variety of techniques and models to help us understand or predict the behavior of these systems. Here we review developments in this field, including such concepts as the small-world effect, degree distributions, clustering, network correlations, random graph models, models of network growth and preferential attachment, and dynamical processes taking place on networks.
17,647 citations
"Job Information Networks, Neighborh..." refers background in this paper
...23 In view of Nieke Oomes (2003), who shows that if labor can be hired in continuous quantities, the long run distribution of employment in spatially separated markets is uniform, we conjecture that persistence of nontrivial effects of social networks on job-related outcomes is intimately related to the presence of a labor-market participation decision....
[...]
...23 In view of Nieke Oomes (2003), who shows that if labor can be hired in continuous quantities, the long run distribution of employment in spatially separated markets is uniform, we conjecture that persistence of nontrivial effects of social networks on job-related outcomes is intimately related…...
[...]
Book•
25 Nov 1994TL;DR: This paper presents mathematical representation of social networks in the social and behavioral sciences through the lens of Dyadic and Triadic Interaction Models, which describes the relationships between actor and group measures and the structure of networks.
Abstract: Part I. Introduction: Networks, Relations, and Structure: 1. Relations and networks in the social and behavioral sciences 2. Social network data: collection and application Part II. Mathematical Representations of Social Networks: 3. Notation 4. Graphs and matrixes Part III. Structural and Locational Properties: 5. Centrality, prestige, and related actor and group measures 6. Structural balance, clusterability, and transitivity 7. Cohesive subgroups 8. Affiliations, co-memberships, and overlapping subgroups Part IV. Roles and Positions: 9. Structural equivalence 10. Blockmodels 11. Relational algebras 12. Network positions and roles Part V. Dyadic and Triadic Methods: 13. Dyads 14. Triads Part VI. Statistical Dyadic Interaction Models: 15. Statistical analysis of single relational networks 16. Stochastic blockmodels and goodness-of-fit indices Part VII. Epilogue: 17. Future directions.
17,104 citations
Book•
01 Jan 1990
TL;DR: In this article, a new approach to describing both stability and change in social systems by linking the behavior of individuals to organizational behavior is proposed. But the approach is not suitable for large-scale systems.
Abstract: Suggests a new approach to describing both stability and change in social systems by linking the behavior of individuals to organizational behavior.
16,017 citations
TL;DR: Social capital has a definite place in sociological theory as mentioned in this paper, and its role in social control, in family support, and in benefits mediated by extra-familial networks, but excessive extensions of the concept may lead to excessive emphasis on positive consequences of sociability.
Abstract: This paper reviews the origins and definitions of social capital in the writings of Bourdieu, Loury, and Coleman, among other authors. It distinguishes four sources of social capital and examines their dynamics. Applications of the concept in the sociological literature emphasize its role in social control, in family support, and in benefits mediated by extrafamilial networks. I provide examples of each of these positive functions. Negative consequences of the same processes also deserve attention for a balanced picture of the forces at play. I review four such consequences and illustrate them with relevant examples. Recent writings on social capital have extended the concept from an individual asset to a feature of communities and even nations. The final sections describe this conceptual stretch and examine its limitations. I argue that, as shorthand for the positive consequences of sociability, social capital has a definite place in sociological theory. However, excessive extensions of the concept may j...
11,460 citations