The Online Professional Social Network: Further Understanding the Relationship between Contacts and Labor Market Outcomes
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Empirical findings on the impact of social networks on wages and job search outcomes are contradictory. One reason for these inconsistent findings is that researchers must rely on pre-existing data sets with limited information on networking. Each study differs in how they define and measure the networking variables as well as the population targeted by the surveys they employ. By using a dataset specifically created to unambiguously measure the relationship between the size and the composition of an individual’s online professional social network and labor market outcomes, this paper seeks to overcome the inherent shortcomings encountered when using existing data to examine these relationships. The findings reveal that networking matters. There is strength in weak ties when it comes to salaries and wages; however, the composition of the network impacts hourly workers differently than salaried workers. Furthermore, the analysis reveals that reservation salaries increase when a contact is used to find employment, but reservation wages for hourly workers are not impacted by the use of a contact or the size of one’s network. Finally, the use of a contact reduces search time for salaried workers, but not for wageworkers.
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