Social Networks 10.16.08 Where we are Who gets ahead? o Family background o Education o Aspirations/expectations o Schools/neighborhood effects o Social capital Today How much does getting ahead depend on knowing the right people? Social networks and attainment Logic: two types of capital Human capital o Personal productive capacity: any aspect of a person that increases their productive capacity (ultimately will increase their earnings) o Often measured with education, on-the-job training, health o Investment Social capital o Resources that reside in relationships/social network (do not reside in a person but in relationships themselves) o There s something about relationships that increase access to capital o NB: person doesn t own capital, but different people can access different amounts of capital o Investment: can invest in a network that allows you to get ahead in social capital Social capital is embedded in social networks (basic features of networks, ways of thinking about networks): Size of networks: how many people do you know? Density of network: the extent to which the people you know also know each other/are linked to one another Nature of relationships themselves Strength/valence of relationship: close friend or acquaintance? /do you like this person or do you hate him? Organization of network What would the network look like if you were to graph it? Clusters? Social location of ego, alters The extent to which the people in your network are all of the same location A quick look at social networks Core discussion networks in the US: (McPherson et al 2006) Sample Discussion networks largest for o Whites (only 15% have non-white confidant) o Highly educated respondents o Younger people o (No net gender difference) From the table (which compares network size in 1985 and 2004): the number of people we seem to be able to confide in is shrinking - Hypothesis: o Internet? o Different ways of interpreting the questions? (People may have a higher bar for what they consider important matters) Discussion networks shrinking (from same study) o 9% only confide in spouse (up from 4% in 1985) o 57% have non-kin confidant (down from 80%) o Density of networks increased Why we might care Purported macro-level benefit: social glue o Putnam: Bowling Alone o The debate has not yet been resolved on whether there are macro benefits Possible individual-level benefits of social capital (what we are focusing on) o To what extent do social networks help people get ahead? Network Approaches (Re)introduce 5 o Social pysch model o strength of weak ties (Grenovetter) o Friends in high places (Lin) o Structures holes (Burt) o Employers as social capitalists (Fernandez et al) Differ in... o Outcome affects o Mechanism through which networks matter o Prescriptions for attainment Social Psych Model, revisited Effect of individual ability on attainment mediated by networks o The people in your significant other network are very much important in the attainment process because they develop expectations that you then internalize Strong ties: parents, teachers, and peers o People you presumably have strong ties with The mechanism is saying that networks matter because of people internalizing the expectations of the networks o Internalization of expectations Prescriptions for attainment: o Choose friends and teachers who will <a href="/keyword/hold-high-expectations/" >hold high expectations</a> for you o Change your parents NB: people who developed this model weren t necessarily thinking in terms of networks, but we can still think of it in terms of networks, or as another form of network model The Strength of Weak Ties, Grenovetter - Instead of it being your close friends that really matter, it is you casual acquaintances that matter - Interested in how people get jobs Strong ties o Family, close friends o Motivated to help, but ineffective Social homophily (these people are very much like you, in the same social circle as you, education level, etc) Know only what you know (because they are very much like you cannot give you additional information you may not have) Weak ties o Casual acquaintances o New information Eg. hair stylist in contact with many people throughout the day and have access to different kinds of information Empirical Result: o 40-50% of jobs found through personal contact o Majority of these contacts through weak ties o 1/3 of job-changers weren t looking Mechanism: information acquisition Prescription for attainment: o Make a lot of acquaintances o Don t rely on family and close friends Friends in all the Right Places, Lin Quality of tie (vs. Grenovetter who just talks about getting any job) Weak ties effective because more likely to be to higher status person o Eg. hair dresser may have clients in higher status Looked at type of job o Quality depends on social position of ties o Advantage of weak ties is greater for low SES people Mechanism: Influence Prescription for attainment: o Make high-status friends o Ingratiation Ingratiating yourself to these people (suck up) Structural Holes, Burt - Thinking about how particular managers get ahead or don t Shape of the network is key (not so much weak ties) Structural hole: o Disconnect between two nonredundant people or groups in network o Manager X spans structural hole This manager is the only way that two different groups of people are related to one another Advantage to spanning structural holes o Information Access (to information that no one else has, you have access to what is going on in both groups, which either group alone doesn t have) Timing Referrals When you re in a structural hole, you can use information to your own advantage o Control Negotiate for favorable terms Play parties off each other Adjust image for each party People who live at the intersection of social worlds are at greater risk of having a good idea there s something about spanning the structural hole that gives you a leg up Mechanism: brokering (if you span structural hole you can broker relationships) Prescription for attainment (if you are a manager): o Identify and insert yourself into structural holes o Guard against network closure Don t talk to the same people all the time Keep your acquaintances from meeting Employers as Social Capitalists, Fernandez, Castilla - Instead of from perspective from job seeker, low SES, or manager, looks at demand side Focus on the demand side Why do employers rely on referrals? o Richer pool of applicants o Better match o Post-hire social enrichment (ees that know each other already are more likely to ) Facilitate trainings, mentoring Creates human capital (new ee will work harder to make other ee look good) Ties reduce turnover Study o Pre- and post-hire data for customer service rep job in large baking service firm o HR databsase on applicants, hires, and referrers (company would give money to employer if they referred other people) o 2-year follow up of hires and referrers Results o Referrals more likely to get job: 11.9% vs. 6.7% Better qualified applicant pool by having referral based services o No differences in turnover rates o No differences in productivity o But, referral-based hiring cheaper for firm Referrals: $1,228 (inc. $250 bonus to referrer) Nonreferrals: $1,394 Prescription for attainment: cultivate friends with jobs in desirable companies Summary Social capital facilitates o Educational attainment (Social Psych Moel) o Job search process (Granovetter, Lin, Fernandez) o Job Performance (Burt) Compensatory effect: o SC has greatest effect on earnings where HC is low (Lin) Policy Question If networks affect attainment, how might we increase social mobility, reduce inequality?