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Job Search and Network Composition: Implications of the Strength-Of-Weak-Ties Hypothesis
Author(s): James D. Montgomery
Source: American Sociological Review, Vol. 57, No. 5 (Oct., 1992), pp. 586-596
Published by: American Sociological Association
Stable URL: http://www.jstor.org/stable/2095914
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JOB SEARCH AND NETWORK COMPOSITION:
 IMPLICATIONSOF THE STRENGTH-OF-WEAK-TIESHYPOTHESIS*

                                       JAMEsD. MONTGOMERY
                                        NorthwesternUniversity

       Workersfind jobs through personal contacts (weak and strong ties) and formal sources.
      Alternativeformulations of the strength-of-weak-tieshypothesis suggest (1) weak ties relay
      job offers more frequently than strong ties, or (2) weak-tie offers are drawnfrom a better
      distribution.Aformal model shows that bothformulations imply a correlation between net-
      work composition and a job seeker's minimumacceptable wage. However, the use of a weak
      tie is never associated with higher expected wages under thefirstformulation, and is only
      sometimes associated with higher expected wages under the secondformulation. These re-
      sults suggest that researchers shouldfocus on job seekers' networkstructures.


Based on the findingthatworkersfrequently independent                           for-
                                                    variable.Moreover,alternative
      locate jobs throughacquaintances   ("weak       mulationsof the strength-of-weak-ties  hypothe-
ties") rather than close friends and relatives        sis suggest thatjob seekers benefit from weak
("strong ties"),Granovetter  (1973, 1974) argued      ties for two distinctreasons.Granovetterempha-
thatweakties play an important in determin-
                                role                  sized thatweak ties relay usefuljob information
ing labor-market   outcomes.Subsequent  theoret-      more frequentlythan strongties, whereasLin's
ical workin the socialresourcesliterature further     formulationsuggested that weak-tie job offers
emphasized the importanceof weak ties (Lin            aredrawnfroma different(oftensuperior)   distri-
1982). However, Bridges and Villemez (1986)           bution.To examinethe empiricalimplications   of
and Marsdenand Hurlbert     (1988) found no sig-      these two formulations the strength-of-weak-
                                                                               of
nificant relationshipbetween tie strength and         ties hypothesis,I offer a formalmodel in which
wages after controllingfor workercharacteris-         workerslocate jobs throughboth personalcon-
tics.Consequently,   someresearchers haveargued       tacts (weak and strongties) and formal (imper-
against the strength-of-weak-ties hypothesis.         sonal)methods,buildingon previousworkin the
Bridgesand Villemez (1986), for example,con-          economics job-search literature (Mortensen
cludedthat"thestrong-weak     dimensionof ties is     1986).'
nottheonly, oreven themostimportant,    attribute
of personalrelationships the labormarket....
                         in                           THE MODEL:NETWORKSTRUCTURE
Future  researchshouldconcentrate exploring
                                    on                AND THE RESERVATIONWAGE
                                    and
otherdimensions socialresources theirrole
                   of
in thejob findingprocess"(pp. 579-80).                Becausejob-seekerslackcompleteknowledgeof
   Reflectionsuggeststhatthe BridgesandVille-         vacanciesandmustrely on information     obtained
mez conclusionmay be premature.     Whileempir-       throughvarious formal and informalchannels
ical analysesof the strength-of-weak-ties
                                        hypoth-                              to
                                                      (e.g., directapplication employers,newspaper
esis havefocusedon the type of tie actuallyused       ads,andpersonal           economists
                                                                       referrals),          oftencon-
to locate a job (althoughsee Lai, Leung,andLin        ceptualizejob searchas a sequenceof wage of-
 1990), the "networksas resources"argument            fers drawnrandomlyfrom an offer distribution.
(Campbell,Marsden,and Hurlbert1986) sug-              (Whenthe nonpecuniary    aspectsof employment
gests that networkstructuremay be the crucial         differacrossjobs, the "wage"mightbe interpret-
                                                      ed as a broaderindexof job quality.)Ifjob search
  *                                                   werecostlessforbothunemployed employed
                                                                                        and
    Directall correspondence JamesD. Montgom-
                            to
ery, Departmentof Economics, NorthwesternUni-            I Boorman(1975) and Boxman,Flap, and Weesie
versity,Evanston,IL 60208. Helpfulcommentswere        (1991) presentrelatedmodels of job searchthrough
receivedfromPeterMarsden.Financialsupport from        strong and weak ties. Halaby (1988) used a search-
National Science Foundationgrant SES-9109056 is       theoreticmodel to examine individuals'decisions to
gratefullyacknowledged.                               searchfor new jobs.

586                    AmericanSociological Review, 1992, Vol. 57 (October:586-596)
JOB SEARCHAND NETWORKCOMPOSITION                                                                       587

workers,  job-seekerswould acceptany offer ex-             Suppose that the workerreceives some (po-
ceeding theircurrent  wage (or value of leisureif        tentiallystochastic)numberof offers each peri-
unemployed)andcontinuesearchingfor a better              od. The distribution the highestoffer received
                                                                             of
job while employed.But if job searchbecomes              each periodis represented H(w), with proba-
                                                                                   by
morecostly once a workeris employed,the opti-            bility densityh(w). Further, WR representthe
                                                                                     let
mal search strategyis more complex: The job              worker's reservationwage and let V represent
seeker sets a minimumacceptable(or "reserva-             the worker's"valueof search,"i.e., the present
tion")wage, rejectinganyoffersbelow thereser-            value of expectedfutureearningsgiven thatthe
vationwage andacceptingthe firstoffer exceed-            workerremainsunemployedat the end of a peri-
ing this wage (Lippman and McCall 1976;                  od. Given this notation,consider the worker's
Mortensen1986).                                          expectedfutureearningsviewed fromthe startof
   Considerthe simplestcase in whichjob search           a period (before any offers are received). Be-
is costless for unemployedworkersbut is pro-             cause the worker'sexpectedfutureearningsare
hibitivelyexpensiveforemployedworkers.      Even         by definitionequal to V if no offer exceeds WR
if an unemployedworkerplaces no value on lei-            and are equal to wI(1 - B) if the highest offer
sure(so thatthecurrent  "wage" zero),thework-
                                is                       exceeds WR, the worker'sexpected futureearn-
er might reject a low-wage offer because em-             ings are
ploymentwould precludefurthersearch,which
might lead to a betteroffer and higher lifetime            WR

earnings.However,thejob-seekerwould gener-                 f Vh(w)dw+ |             1-B h(w)dw.         (1)
ally not wait to receive the maximumpossible               0              WR


offer becauseearningsforegonefromrejectinga
sufficiently "good"offer might exceed the net            Now considertheworker'sexpectedfutureearn-
expectedbenefitfromcontinuedsearch.The fact              ings viewed fromtheend of thepreceding   period
that the job-seeker rejects relatively low-wage          (after all offers were rejected). Given that the
job offersbutacceptsrelativelyhigh-wageoffers            workerdiscountsfutureearningsby the factorB,
suggeststhe existenceof a criticalwage, i.e., the                              is
                                                         this "valueof search" definedimplicitlyby
reservation  wage, at which the job-seekeris in-
different between accepting employment and                         WR

continuingthejob search.                                   V=      fjVh(w)dw+f           |WB   h(w) dw. (2)
   Now consideran unemployedworkersearch-
ing for a job. Two simplifyingassumptionsare
adoptedin thepresentmodel.First,I assumethat             Becausetheworker indifferent
                                                                              is         betweenaccept-
theworker   searchesonlywhileunemployed.2    Sec-        ing a job at the reservationwage and continuing
ond, I ignore the possibility of job dissolutions        the job search,V = wR/(l - B). Substitutioninto
such as quits, layoffs, or retirement.Thus, after        equation1 yields
acceptingan offer, the workeris assumedto re-
main forever employed in thatjob.3 Assuming
thatthe workerdiscountsnext period's income                (1-B)WR=B           j(W-WR)    h(w) dw       (3)
by a factor B < 1, the present value of future                                 R

earningson a job payingwage w is thusequalto
W + SW + +B...
          2W         = w/(I   -_ ).4              whichimplicitlydefinesthe (unique)reservation
                                                  wage.5
  2The implicationsof on-the-jobsearcharethusleft    Equation indicatesthatthe worker'sreserva-
                                                              3
for futurework (Mortensen1986, Sec. 3.1).         tion wage dependson the density, h(w), of the
  I The model could easily be extended to permit
                                                  highest-offerdistribution. Abstractingfrom the
exogenously generatedjob loss so that the worker specific channelsthrough   whichjob information
returnsto unemploymentwith positive probability flows, economistscommonlytake this distribu-
each period.                                      tion as given (for one exception,see Mortensen
   4The assumption an"infinitehorizon,"
                    of                       madefor
the sake of mathematical   tractability,
                                       implies thatthe     I To derive equation3 from equation2, note that
worker'sreservationwage is constantthroughtime.
Unless the workeris nearretirement, presentval-
                                       the
ue of lifetimeearnings(andconsequentlythe reserva-         WR                   ??


tion wage) will be little influencedby changes in (or       J dw= V- JVh(w) dw.
                                                             Vh(w)
even the existence of) a retirement date.                   0                  WR
588                                                      AMERICANSOCIOLOGICAL
                                                                            REVIEW

and Vishwanath1990). But in orderto explore         thatPw > ps because a given weak tie is more
the strength-of-weak-ties hypothesis,I derivethe    likely to producenew information    thana given
highest-offerdistributionfrom more primitive        strongtie.7
assumptionson the sources of job information.          While Granovetter's   assertionseems to im-
Althoughthe analysis could be generalizedso         pose a conditionon the offer probabilities,  Lin's
thatthe workerreceives offers from an arbitrary     "strength-of-ties proposition"appears empha-
                                                                                           to
numberof sources,I assumethatthe workerre-          size differences in the offer distributions.  Lin
ceives job informationthroughthree channels:        (1982) arguedthat "strongties characterize     the
strongties, weak ties, and formal (impersonal)      intimatesocial circle of individualswith similar
search.                                             characteristics weak ties characterize in-
                                                                    and                        the
   I assumethatthe workerpossesses woN     weak     frequent  interactions peripheral
                                                                         and            relationships
ties and (1 - o)N strongties. The worker'snet-      among dissimilarindividuals"(p. 134). In the
work is thus describedby two parameters:    size    presentmodel, this suggests that the strong-tie
 (N)andcomposition Ineachperiod, work-
                     (w).              the          and weak-tie offer distributions  have the same
er receives an offer througheach weak tie with      mean but that the weak-tiedistribution more
                                                                                              is
probability and througheach strongtie with
            Pw                                      dispersed.8  Given a lower bound on the wage
probabilitypsEachweak-tiewage offeris drawn         distribution, also suggeststhatweakties may
                                                                  Lin
froma distribution  Fw(w)withprobability  densi-    providea better(notmerelymoredispersed)       dis-
tyfw(w), while strong-tie offersaredrawnfroma       tribution opportunities individuals
                                                              of              for            withlow
distribution Fs(w) withdensityfs(w).The worker      initialpositions.9(Initialposition might referto
 also receives formaloffers by applyingdirectly     the worker'sfather's relative wage or occupa-
to M firmsduringeach period.Eachfirmmakes           tional status.) Thus, beyond suggesting differ-
 an offer with probability formal offers are
                           PF;                      ences in the dispersionof the offer distributions,
drawn from a distributionFF(W) with density         Lin's theoryalso implies thatthe offer distribu-
fF(w). Thus, the worker's highest offer is less     tions may (sometimes)be ranked.'0
thanw only if each offer receivedis less thanw.        Returning the model,considerhow changes
                                                                  to
 Assuming that wage offers are drawnindepen-        in the networkstructure and cl) influencethe
                                                                              (N
                         of
 dently, the distribution the highest offer re-     reservationwage (WR). (All results are proven
ceived each periodcan be written                              in
                                                    formally theAppendix.)     Holdingnetwork    com-
                                                    position constant,the reservationwage rises as
  H(w)= [1      PF[1 -FF(W)]jM                      network size increases. Intuitively,the worker
          [I   _pW   [IFW   (W)]]   (N
                                                    expectsmoreoffers (fromboth weak and strong
                                                    ties) as N increasesandthusthe workerbecomes
          [1 - Ps [1 - Fs   (w)]](1-(O)N.     (4)   more selective. AlthoughWR is unambiguously

   While I have so far placed no restrictions on       7To generatethis conditionendogenouslyfromthe
the relationship between the offer probabilities    presentmodel, one might assume thatjob offers are
or offer distributions equation4, discussions
                      in                            sometimes observedby dyads. Because triadbias is
of the strength-of-weak-ties hypothesis by          greateramongstrongties, the workeris morelikely to
                                                    receive the same offer from two strong-tiefriends
Granovetter  (1973, 1974, 1982) and Lin (1982,      thanfromtwo weak-tieacquaintances.
1990) suggest two possibilities. Granovetter           8 In the economics literature,
                                                                                    increaseddispersion
(1982, p. 105) assertedthat "ouracquaintances       is typicallyformalizedas a "mean-preserving spread"
('weak ties') are less likely to be socially in-    (Rothschild and Stiglitz 1970; see also Mortensen
volvedwithone another   thanareourclose friends     1986). Formally,the distribution H(w) is a mean-pre-
('strong ties')."6 Accordingly, since weak ties     servingspreadof of(w) if
are"moreproneto move in circlesdifferent    from                              x         x
one's own," there is a "structural tendencyfor          EHIWI   = EH4w1 and       dw
                                                                              IIH(w) > |    Hf(w) dw
those to whom one is only weaklytied to have                                  0         0
better access to job informationone does not                     for all x.
alreadyhave" (Granovetter    1974, p. 52). In the     9Conversely,an upperboundon the offerdistribu-
presentmodel, Granovetter's   argument  suggests   tion implies thatstrongties are betterfor individuals
                                                   with high initialpositions.
   6 In the languageof biased networktheory,strong    10 sometimes
                                                        I           rankdistributions thebasisof "first-
                                                                                    on
ties areassumedto have a greater"triadbias"(Fararo orderstochasticdominance."   Formally, H(w) stochas-
and Skvoretz1987).                                 tically dominatesof(w) if H(w) <!4(w)for all w.
JOB SEARCHAND NETWORKCOMPOSITION                                                                     589

                             betweenthe res-
increasing N, the relationship
           in                                    Thus, both the condition associated with
ervationwage andnetworkcomposition    depends Granovetter   (equation6) and the conditionsas-
                                              sociatedwith Lin (equation8, sometimesequa-
on the offer probabilities offer distributions.
                         and
  As shown in the Appendix, the reservation   tion 7) imply thatthe worker'sreservation wage
wage is increasing the proportion weak ties
                  in              of          increasesas networkcompositionshifts toward
(o) if                                        relativelymore weak ties. Because the value of
                                              search,which is equal to expected futureearn-
  Ps [1 - Fs (w)] -Pw [I -Fw (w)] <0.     (5)
                                              ings, is directlyrelatedto the reservationwage,
Thecondition   expressed equation impliesthat each conditionimpliesthatweak ties arebenefi-
                        in         5
WR is increasing o) if
                  in                          cial for the job-seeker.Indeed,if networkcom-
                                              position were chosen to maximize futureearn-
  Pw >Ps given Fw (w) = Fs (w) for all w, (6)
                                              ings, the workerwould choose an all-weak-tie
or if                                         networkwheneverthese conditionshold.
  Fw (w) < Fs (w) for all w given Pw =Ps.    (7)
                                                     THE USE OF A WEAKTIE AND
Thatis, the reservationwage is increasingin the      EXPECTED WAGES
proportion weak ties if weak ties relayjob of-
            of
ferswithhigherprobability strong (equa-
                           than       ties           The Granovetterand Lin formulationsof the
tion 6) or the weak-tieoffer distribution supe-
                                         is          strength-of-weak-ties  hypothesiscould be tested
rior to the strong-tiedistribution(equation7).       empiricallyby examiningthe reservationwage
Intuitively, increasein the proportion weak
             an                          of          of job-seekers:Holding networksize constant,
ties makesthe worker  moreselectivebecausethe        does the reservation  wage rise as the proportion
workerexpectseithermoreor betteroffers.              of weakties increases?  Echoingthe"networks    as
   The reservation wage is also increasingin the     resources"  argument  (Campbellet al. 1986), the
proportion weak ties undera second condi-
             of                                      modelthussuggestsa linkbetweenthe worker's
    1
tion:                                                network structureand labor-marketoutcome.
           00              00
                                                     However,insteadof focusing on networkstruc-
                                                     ture, empiricalstudies of the strength-of-weak-
  Pw = Ps, fwfw (w) dw = f wfs (w) dw,        (8)
            0               0                        ties hypothesishave examinedthe relationship
                                                     betweenwages and the type of tie actuallyused
and there exists some fv'such that                   to find a job (BridgesandVillemez 1986;Mars-
                                                     den andHurlbert   1988).The absenceof a signif-
            > Fs (w)      if W< fw                   icantrelationship betweenwages andtie strength
  Fw(w)     = Fs (w)      if w .=i                   aftercontrollingfor humancapitalvariableshas
            < Fs (w)      if W> fw.                  led theseresearchers doubtthe relevanceof tie
                                                                           to
                                                     strength labor-market
                                                               for             outcomes.
Thatis, the reservationwage is increasingin the          However, these "tests" of the strength-of-
proportion weak ties when both types of ties
           of                                        weak-tieshypothesismay be misguided.To ex-
relayofferswith the sameprobability, bothoffer       plorethe implications the preceding
                                                                            of               modelfor
distributionshave the samemean,andthe weak-          expectedwages, some additional    notationis nec-
tie distribution is "more dispersed" than the        essary.First,thehighest-offer distribution(equa-
strong-tiedistribution. economists studying
                       As                            tion 4) is re-writtenas
job searchhave long recognized,increaseddis-
persion of the offer distributionmakes search     H (w) = L4DF(W)]M [DW(W)] (O [(Ds(W)]fI 'N,
more valuable since job seekers are concerned
                                           i.e., where
only with the uppertail of the distribution,
thoseoffersexceedingthereservation  wage.Thus,
if the weak-tiedistribution moredispersed,an
                           is                     (Di(wj 1 Pi [ I - F. (w)]
                                                            -I
increasein the proportion weak ties improves
                          of                                             }.
                                                           for i E {IF,W,S                 (9)
the worker'schanceof findinga high-wagejob
andthusraisesthe worker'sreservation   wage.     The densityfunctioncan thenbe writtenas

  " AlthoughthisconditionimpliesthatFwis a mean-       h(w) H'(w)    = gF (W)   +   gw(W)+ gS (W),
preserving spread Fs, mean-preserving
                   of                         need
                                        spreads
                                 condition.
not satisfy this "single-crossing"                   where
590                                                                            AMERICANSOCIOLOGICAL
                                                                                                  REVIEW

                                                                          characteristics. Becausethe precedingmodelab-
  gF (W)     MpFfF            (w) VPF (W)]M_ [VW (W)]              (ON
                                                                          stracts from human capital differences across
             [(DS      (W)]    (    01,                                   workers,this assumption equivalentto the be-
                                                                                                   is
                                                                                                           hypothesisim-
                                                                          lief thatthe strength-of-weak-ties
                                                                          plies E{ wlW} > E{ wIS}. But analysis of equation
  gw (w) o(Npwfw (w)                       VFF   (W)]M
                                                                          13 demonstrates none of the conditionsas-
                                                                                           that
                                   ON
             [(DW(W)]                     [(DS (W)]    (I-o)N,            sociatedwith Granovetter Lin are sufficient
                                                                                                    and
and                                                                       to guarantee relationship.
                                                                                      this              Indeed,as shown
                                                                          in theAppendix, condition
                                                                                          the          expressedin equa-
  gs (W)     (1 - o))Npsfs (w)                   VFF (W)]M                tion6 unambiguously   impliesthe opposite:If the
             [(DW(W)]              ON[(DS    (W)]     (1-(O)N-1.   (10)   weak-tieandstrong-tie  offerdistributions the
                                                                                                                  are
                                                                          same, E{wIW} <E{wIS}        if pw > ps. Thus, if
   Because the worker searchesuntil receiving                             Granovetter correctthat weak ties are more
                                                                                           is
                             wage,thework-
anofferexceedingthereservation                                            likely to providenew information arestrong
                                                                                                                 than
er becomesemployedin a givenperiodwithprob-                               ties,then,holdingeverything constant,
                                                                                                           else          work-
ability                                                                   ers findingjobs throughweak ties will receive
  00                                                                      lower averagewages.
  | h (w) dw.                                                                Although this result holds regardlessof net-
  WR                                                                      worksize (N), networkcomposition(o)),andthe
          uponemployment,the worker'sex-
Conditional                                                               probability obtaininga formaloffer (PF), it is
                                                                                          of
pectedwage can be writtenas                                               instructive considerthe specialcase in which
                                                                                         to
             00                                                           the workerholds one tie of each type, i.e., N = 2
                 J wh(w)dw                                                and o)= 1/2, and never receives offers through
  E{w} =     WR                                                    (11)   formalchannels,i.e., PF = 0. Further     assumethat
             00
                                                                          the worker almost always receives an offer
                 | h (w) dw                                               throughthe weak tie, i.e., Pw is close to 1, but
             WR
                                                                          almostneverreceivesan offerthrough strong  the
   The workeraccepts a job throughchannel i,                              tie, i.e., Ps is close to zero.In the periodin which
where i representseither F (formal), W (weak                              an offer is accepted,an individualacceptinga
tie), or S (strongtie), with probability                                  job througha strong tie is thus likely to have
  00                                                                      received two offers. An individualacceptinga
  Jg, (w) dw.                                                             job througha weak tie, on the other hand, is
  WR                                                                      likely to have received only one offer. Because
Conditionalupon employment,the probability                                the expectedhighestoffer increasesas the num-
thatthe workeraccepts a job throughchanneli                               berof offersrises,the use of a weak tie impliesa
can be written                                                            lower expectedwage.
            00                                                               Intuitively,then,E{wIS} exceeds E{ w1W}       un-
            Jgi (w) dw                                                    derthiscondition(equation becausethe use of
                                                                                                          6)
  Pr(i) =   WR                            for i E {F,S,W}. (12)           a weak tie indicatesthatthe workerreceived(on
            0o
                                                                          average)fewer offersduringthe periodin which
            Jh (w) dw                                                     an offer was accepted.But if periods are very
            WR
                                                                          short (implying that the offer probabilitiesare
Conditional upon accepting an offer through                               close to zero), the workeris unlikelyto receive
channel i, the worker's expected wage can be                              several offers simultaneouslyand the use of a
written                                                                   weak tie reveals almostnothingaboutthe num-
                  00                                                      ber of offers received.'2In the limiting case in
                  Jwgi (w) dw
  E{wli}=         WR                             foriE {F,S,W}.
                                                '2Althoughsomewhatambiguous,periodlengthin
                  oo
                                             the precedingmodelprobablybest corresponds the
                                                                                          to
            |g, (w)dw                  (13)
            WR
                                             amountof time ajob-seekerhas to respondto a firm's
                                             offer. When periodsare long, the workeris likely to
  Researchershave assumedthat the strength- hold severaloffers simultaneously.As periodlength
of-weak-tieshypothesisimpliesthatworkersob- approacheszero (implying that the job-seeker must
tainingjobs throughweak ties should receive immediatelyaccept or reject each offer), the proba-
higherwages aftercontrollingfor humancapital bility of multipleoffers becomes negligible.
JOB SEARCHAND NETWORKCOMPOSITION                                                             591

which periodlength is infinitesimal,the worker     5 butrejectanofferof 1. Now considerthe work-
will receive at most one offer (throughall chan-   er's expectedwage conditioned thetype of tie
                                                                                  on
nels) in each period.In this case, holdingevery-   used. Because strong-tieoffers will only be ac-
thingelse constant,E{wIW}= E{wIS .                 ceptedif w = 5, E IwISI = 5. But the workerwill
   While equation 6 always implies E{ wIS >        accepta weak-tieofferof either4 or 5. Assuming
E{wIW, theconditions   associated  withLin(equa-   thatthe worker randomly  choosesbetweenoffers
tions 7 and 8) do not permit an unambiguous        if boththe strongtie andweaktie offersareequal
ranking the meanwages. Two examplesdem-
         of                                        to 5, E{wIW}= 4.7 <5= E(wIS}.
onstrate these conditionsareconsistentwith
         that
E{wIS} > E{wIW}.To make these examples as                                  Spread
                                                   Example2: Mean-Preserving
transparent possible, I assume that the wage
            as
offers are discreterandomvariables.However,        To show that the conditionexpressedby equa-
examplesin whichoffersaredrawnfromcontin-          tion 8 is also consistent with the relationship
uous distributions could be constructed prove
                                         to        E IwIS > E IwIW},I againassumeN= 2, X = 1/2,
the same point.                                    andPF = 0. Further assumethatstrong-tieoffers
                                                   aredrawn  froma three-pointdistribution which
                                                                                          in
Example1: StochasticDominance
                                                   fs (1)= 1/4, fs (3)= 1/2, fs (5)= 1/4, (18)
Assume thatthe workerhas one tie of each type
and never receives offers throughformalchan- andthus,
nels, i.e., N = 2, X = 1/2, andPF = 0. Furtheras-
                                                              0      forw< 1
sumethatwage offersfromstrongties areequal-
ly likely to be either 1 or 5:                      Fs(w)=   1/4 for l< w < 3
                                                             3~/4 for3? w<5
                                                              1      forw?5.              (19)
  fs (1)=fs (5)= 1/2.                        (14)
                                                  Assume thatweak-tieoffers aredistributedsuch
Thus, the cumulativedistributionof strong-tie that
offerscan be written
                                                   fw(1) =fw(2) =fw(4) =fw(5) = 1/4,      (20)
               0     forw< 1
   Fs(w)= 1/2 for I< w<5
                                                  andthus,
               1     for w > 5.              (15)
                                                              0      forw< 1
Assumethatoffersfromweakties aredrawn       from
a three-point                in
               distribution which                             1/4 forl<w<2
                                                    Fw(w) 1/2 for2< w<4
  fw (1)  = fw (4) = 1/4., fw (5) = 1/2.     (16)            3/4 for4< w<5
                                                               I     forw?5.              (21)
This implies the following cumulativedistribu- Comparingthe distribution     functions,Fw(w) >
tion of weak-tieoffers:                         Fs(w) for w < 3 and Fw(w) < Fs(w) for w ? 3.
                                                BecauseE{w I = 3 forbothdistributions, con-
                                                                                       the
              0    forw< 1
                                                ditionexpressedby equation8 holds:Fw(w)is a
   F. -) 1/4 forl< w<4                          "mean-preserving           of
                                                                   spread" Fs(w).
             1/2 for4< w<5                         Assuming B=.9 andp= .5,WR=      3.538. In this
              1    forw?5.                 (17)
                                                case, as in example 1, the workeraccepts only
Comparing cumulativedistributions, is ap- offersof 4 or 5. Becauseonly strong-tie
            the                         it                                             offersof
parent that Fw(w) "stochastically dominates" 5 are acceptable,E{ wIS) = 5. Again assuming
Fs(w):Fw(w) < Fs(w) for all w. AssumingPw = thatthe workerchooses randomlywhen receiv-
Ps = p, the conditionexpressedin equation7 is ing offersof 5 through   bothweakandstrongties,
thussatisfied.                                  E{wIW)= 4.517 < 5 =E{wIS}.
   Given assumptions Bandp, the reservation
                      on
wage andmeanwages can be calculated. ex-For       Although   theseexamplesestablish thecon-
                                                                                    that
ample,supposeB= .8 andp = .5. Using Appendix ditions expressedby equations7 and 8 are not
equationAl (or the discreteanalog of equation theoretically              with the negativefind-
                                                              inconsistent
3), the reservationwage is WR= 3.280. In this ings reportedby Bridges and Villemez (1986),
case, the workerwill acceptanofferof either4 or alternative distributional assumptions imply
592                                                       AMERICANSOCIOLOGICAL
                                                                             REVIEW

E( wIWI> Ef wIS Inthenextexample,I assume empirical evidence. Although little is known
                    1.
thatwage offers are distributed      lognormally.      aboutthe shapeof actualoffer distributions,   ex-
                                                       amplesusing the lognormal(andother)distribu-
Example3: LognormalOfferDistributions                  tions suggest that the use of a weak tie should
                                                       imply higherexpectedwages when the weak-tie
Assume that the offer distributions lognor- distribution eithermoredispersedor stochasti-
                                           are                      is
mal with means ,UF .75, gw = Us = 1, and stan- cally dominant.
                        =
darddeviationsaF = 6W= 1, (s = .75. The weak-             Lin's hypothesismightbe reconciledwith the
tie distribution   thus stochastically  dominatesthe empiricalevidence by assumingthatbothof the
formal distributionand is a mean-preserving conditionsassociatedwith Granovetter Lin             and
spreadof the strong-tiedistribution.        Assuming hold: Pw > Ps and Fw(w) is superiorto Fs(w).
PF=PW=PS = 1,N=6, 0)=.5,M= 8, andB3=.8, Because I have proventhatthe use of a weak tie
it can be shown thatWR = 1.884 and                     implies lower wages given Pw > Ps and suggest-
                                                       ed that a superiorweak-tie distribution    implies
   Et wIW = 4.185 > Et wIF I = 3.821                   higherwages,thesetwo effectsmightoffseteach
                                                       other. However, as the next example suggests,
                  > E(wIS I = 3.159.
                                                       the magnitudeof the negativeeffect is likely to
                                                       be quitesmall (andmay be statistically  insignifi-
   Undereitherequation7 or 8, i.e., Fw stochasti- cant in empiricalwork). Thus, the effect of dif-
cally dominatesor is a mean-preserving         spread ferences in the offer distributionsis likely to
of Fs, it seems likely thatE(wIWI> E(wISIfor a swampany effect due to differencesin the offer
large class of distributions.)3     Although I have probabilities.
made little progressdefining this class analyti-          Althoughresearchers  havebeen unableto find
cally, a rather   strongconditionon the offerdistri- a significantrelationship  betweenwages andthe
butionsthatguarantees inequality present- use of a weak tie after controllingfor human
                            this            is
ed in the Appendix.                                    capital variables, both Bridges and Villemez
                                                       (1986) and Marsdenand Hurlbert      (1988) report
EMPIRICAL         IMPLICATIONS                         a positive zero-order correlation.If, as Bridges
                                                       and Villemez suggest, humancapital variables
The precedinganalysissuggeststhatthe conclu- areproxiesfor social capitalformation, zero-       the
sion reachedby BridgesandVillemez (1986)               ordercorrelationmight be explainedby differ-
thattie strength a relativelyunimportant
                    is                          factor ences in network structureacross workers.To
in labor marketsuccess - may be premature. see this, considera final example in which the
Supposethatweakties arebeneficial        becausethey conditionassociatedwithGranovetter       holds,i.e.,
are more likely to relay job information as Pw> Ps , while the conditionassociatedwith Lin
Granovetter      suggests. In this case, I have estab- does not, i.e., Fw(w) = Fs(w) for all w. Assume
lished that the worker'sreservationwage (and wage offers are drawnfrom lognormaldistribu-
thus expected futureearnings)rises as the pro- tions with meansR = gw = gS = 1 andvariances
portionof weak ties in the worker'snetworkin- a, = a'w = a's = 1. Furtherassume M = 6, B =.8,
creases.But althoughnetworkcompositionis an andpw = .2 > Ps = .1 > PF = .05. The worker's
important     determinant labormarketsuccess, reservation expectedwages given severalal-
                            of                                     and
the use of a weak tie does not imply higherex- ternativeassumptionson the size and composi-
pectedwages.                                           tion of the worker's network are presentedin
   While I have shown thatthe use of a weak tie Table 1.
is consistent with lower expected wages even              This example illustratesresultsalreadyestab-
when weak-tieoffers are drawnfrom a superior lished:Individualswith large networksand/ora
distribution,    Lin's (1982) "strength-of-ties  prop- large proportion weak ties in their networks
                                                                         of
osition" is more difficult to reconcile with the will set relativelyhigh reservation      wages. In this
                                                       example,suchindividuals    also receiverelatively
    13 In
          the limitingcase in which the workerreceives highexpectedwages. Thisrelationship consis-
                                                                                               is
at most one offer (throughall channels)in each peri- tent with the findingsof Campbellet al. (1986):
od, it is straightforward proveEs wlW) > Es wiS) if Individuals highsocioeconomic
                          to                                       of                     statusarelike-
weak-tieoffersaredistributed    uniformly [a,b]while ly to have largerbut less tightly knit networks
                                          in
strong-tieoffers areuniformin [c,d] wherea + b > c + thanindividuals low socioeconomic
                                                                        of                    status.But
d and b> d.                                            while Et w I is increasingin N and co,Et wIW}is
JOB SEARCHAND NETWORKCOMPOSITION                                                                            593

Table 1. ReservationWages, Expected Wages, and Prob-             ture,heterogeneity thepopulation
                                                                                      in             thusinduces
         ability of Using Search Method by Network               EtwIW} > EtwIS}. This result is driven by the
         Structure
                                                                 differences in the proportionsPr(W)and Pr(S)
                                     Network Structure           across workertypes: Workerswith a large pro-
                                                                 portion weakties (andthushighexpectedwag-
                                                                         of
Wagesand                     N=3      N=3     N=6     N=6
Probabilities               cl)= 1/3 clo=2/3 co= 1/3 cl)= 2/3    es) are much more likely to use weak ties (and
                                                                 less likely to use strongties).
Reservation         WR       1.679      1.804   2.125    2.310     In this analysis, I have contrastedalternative
  wage                                                           informaljob-finding methods - weak versus
Expected        E{wI        3.847      4.031    4.513    4.785   strong ties - ratherthan informaland formal
  wage                                                           methods. However, given the symmetryof the
Expectedwage conditionalupon using a                             model with respect to each of the job-finding
  Formal    E{wIFI 3.858 4.046                  4.525    4.800   methods,the analysisis easily generalized.Par-
    method                                                       allelingBridgesandVillemez (1986), Corcoran,
  Weak tie E{wIW} 3.830 4.019                   4.502    4.779   Datcher,and Duncan (1980) found that the use
  Strongtie E{wIS} 3.849 4.037                  4.517    4.793   of a personalcontactis not associatedwith high-
Probabilityoffinding job througha                                er wages and concluded that such contacts are
  Formal       Pr(F)      .425    .371           .271     .229   unimportant labor marketsuccess. But if in-
                                                                                in
    method                                                       formalandformaloffersaredrawn     fromthe same
  Weak tie Pr(W)          .290    .505           .367     .618   distribution, differencesshould be expected
                                                                                no
  Strongtie         Pr(S)     .285       .124    .363     .153   in the averagewage acrossjob-findingmethods
                                                                 used.Networkstructure,    however,shouldbe cor-
                                                                 relatedwith wages if personalcontactsincrease
                                                                 the offer arrivalrate.
            equalto Et wISI for each network
approximately
structure.14
                                                                 CONCLUSION
   Assume that the labor force comprises two
typesof workers: have small,mostly strong-
                 half                                  Bridges and Villemez (1986) argued that tie
tie networks(N = 3, co= 1/3) while the otherhalf       strengthis not an important  dimensionof social
havelarge,mostlyweak-tienetworks(N = 6, co=            capitalbecausetheyfailedto find a positiverela-
2/3). The formergroupis represented column
                                     by                tionshipbetweenthe use of a weaktie andwages
1 in Table 1 andthe lattergroupis representedby        after controllingfor workercharacteristics.  My
column 4. The mean wages for the population            analysis, based on an economic model of job
can be written                                         search,suggeststhatthis conclusionmay be pre-
                                                       mature.  Alternative             of
                                                                            formulations the strength-
  E (wIW} = SPr(W)EIwIWI                               of-weak-ties hypothesis suggest that weak ties
                     X Pr(W)                           may be beneficial for two distinct reasons.
                                                       Granovetter  emphasized weakties relayuse-
                                                                                 that
                 (.290)(3.830) + (.618)(4.779)         ful job information  more frequentlythan strong
                        .290 + .618                    ties, whereas Lin's formulation suggests that
              = 4.476;                                 weak-tiejob offers are drawnfrom a different
                                                       (oftensuperior)              AlthoughLin's for-
                                                                        distribution.
                                                       mulationseems difficult (althoughnot theoreti-
  E IwISI = EPr(S) Et wISI                             cally impossible)to reconcilewith the empirical
                      I Pr(S)                          evidence on wages, Granovetter'sformulation
                -(.285)(3.849) + (.153)(4.793)         implies that the use of a weak tie will be nega-
                        .285 + .153                    tively (although perhapsweakly)relatedto aver-
              = 4.179,                                 age wages.
                                                          My analysis suggests that researchers  should
where the summationsare taken over worker devotemoreattention therelationship to               between
                                    for
types.Intheabsenceof controls network           struc- networkstructureand labor-market      outcomes.
                                                       The relationship  betweenwages andthe use of a
   14 This resultwould still hold if the common offer  particular job-findingmethodmay be counterin-
distribution improvesas N or corises as suggestedby tuitive:The use of a weaktie couldbe associated
Lin's (1982) "strength-of-positions   proposition."    with lower wages even though weak ties relay
594                                                                                 REVIEW
                                                                 AMERICANSOCIOLOGICAL

offersmorefrequently    thanstrongties andweak-          Appendix
tie offersare(on average)superior offersfrom
                                    to
othersources.However,the presentmodel pre-               NetworkStructureand the ReservationWage
dicts an unambiguous     relationshipbetween res-        Integrating parts,equation3 may be rewrittenas
                                                                    by
ervation wages and network structure:Both                                      ,00

Granovetter's and Lin's formulations of the                 (1-B)wRH    ={      f l-H(w)dwj          '                     (Al)
strength-of-weak-ties   hypothesisimply that the                               tWR)

reservation   wage rises as the proportion weak
                                         of              wherewWH the reservation
                                                                   is              wage corresponding theH(w)
                                                                                                      to
ties in a job-seeker'snetworkincreases.                  distribution.
                                                            Consideran alternativeoffer distribution,M(w),where
   Economicmodels of job searchseem to offer                00                   00
a useful framework examinationof the rela-
                      for                                   f I - H(w) dw > | I - M(w)        dw              for all x,   (A2)
tionshipbetweensocialnetworksandlabor-mar-                   x                 x
ket outcomes.By relaxingseveralof the simpli-            or stateddifferently,
fying assumptionsadoptedin the presentanaly-                00

sis, researchers could addressa varietyof other              J H(w) - H(w) dw <0       for all x.            (A3)
                                                             x
issues raisedin the strength-of-weak-ties  litera-                                      wage for the M(w)distribu-
                                                         Let wHrepresent the reservation
ture. Extendingthe model to permiton-the-job             tion so that
searchwould allow examination the relation-
                                   of
ship betweenthe type of tie used, priorwage (or             (1-awe=~           fJ1- (w)       dwj.                         (A4)

prestige), thecurrent
            and            wage (Wegener1991).'5                               tR)
Further,by specifying the costs of searching
                                                         I establishwiH> wf                If
                                                                          Hby contradiction. wWH WH, inequal-
                                                                                               <
through   alternativechannels(as in Holzer 1988),
                                                         ity A2 implies that
researchers   could examineGranovetter's  (1974,
                                                            00                   00                      00
p. 54) claim that unemployedjob-seekers are
morelikely thanemployedjob seekersto turnto                  f 1 -Hw)   dw <         f 1 H(w) dw <       f I-H(w) dw (AS)
                                                             WR                  WR                      WR
their strong ties.'6 Alternatively,contact status
could be incorporated the model to evaluate
                         in                              Thus, the right-hand  side of equationAl exceeds the right-
Lin's (Linet al. 1981;Lai et al. 1990) pathanal-         hand side of equationA4. However, underthe assumption
                                                         that w H < WH, the left-handside of equationA4 must (at
yses. Finally,following Marsdenand Campbell
                                                         least weakly)exceed the left-handside of equationAl. This
(1990), future researchcould incorporateboth             contradictionestablishes that w H cannot be less than or
sides of the labormarket employersas well as
                           -
                                                         equal to (i.e., must exceed) wRf.
workers- into the analysis. Once recruitment                SupposethatH(w) represents offer distribution
                                                                                           the                given
methods and wage determinationare endog-                 networksize NH and f(w) representsthe distribution   given
enized,researchers   couldexaminetheinteraction          networksize NL whereNH > NL.Fromequation9,
betweensocial networkstructure the income
                                   and                      H(w) - Hf(w)= H(w) [['14W(W)I)(NH                 -NL)
distribution   (Mortensenand Vishwanath'    1990;
Montgomery1990, 1991a, 1991b).                                                 [(T>S(W)](l-())(NHNL) _- I]                 (A6)

JAMESD. MONTGOMERY AssistantProfessorof Eco-
                 is                                         Because the bracketedexpression is negative for all w,
nomicsand a FacultyFellow at the Centerfor Urban         inequality A3 holds. Holding network composition con-
Affairsand Policy Researchat Northwestern     Univer-    stant, the reservationwage is thus increasing in network
sity. In his research he explores the relationshipbe-    size.
tween social networksand labor-marketoutcomes,              Now let M(w) representthe highest-offer distribution
attemptingto integrate economic and sociological         when the workerhas 0N weak ties and (1 - o)N strongties;
conceptionsof labor markets.Building upon ethno-         H(w) representsthis distributionwhen the workerhas one
graphicaccountsof urbanpoverty,he is also working        additionalweak tie (and thus one less strongtie). Equation
                                                         9 implies
to develop rational-choice models of "underclass"
behavior.                                                  H(w) - M(w) = [(Dw(w) - (Ds(w)] H(w)                            (A7)
                                                                                          (Ds(w)
   15 Note that a job-seeker's currentposition may
                                                            Because H(w)/'Ds(w) is always positive, H(w) - M(w)is
also influence networkstructure,  offer distributions,   negative (and thus WR is increasingin w) if the bracketed
and offer probabilities.                                 expression - which is rewrittenas ps[l - Fs(w)] - Pw[l-
   16 The increaseduse of strongties may be relatedto    Fw(w)] in equation5 - is negative. Holding networksize
liquidityconstraintsfaced by unemployedjob seek-         constant,the conditionexpressedby equation5 implies that
ers, which imply that the reservationwage is falling     the reservationwage increases as the proportionof weak
over time (Mortensen1986, pp. 859-61).                   ties increases.
JOB SEARCHAND NETWORKCOMPOSITION                                                                                                                595

  Now assumethe conditionexpressedby equation8 holds                                00


and let Pw = ps = p. From inequalityA3 and equationA7,                              fw [x(w) - x(w)] ,(w)dw
WR is increasingin 0) if                                                         WR
                                                                                            0o
   00


    x
      J    p [Fw (w) - Fs (w)] ['tF          (W)]M   [I      (W)]WN
                                                                                         > w|[x(w) - x(w)] ,(w)dw = O
                                                                                            WR
                                                                                                                               if dx(w) / dw > O

             [(DS(W)]('    - co)N-IdW < 0             for all x.       (A8)                 0o



                                                                                         <w J[x(w) - x(w2)] ,(w)dw = 0         if dx(w) / dw < 0.
Because the last three terms in the integrandare positive                                   WR                                                 (A14)
andincreasingin w, andbecause the conditionexpressedin
equation8 implies [Fw (w) - Fs (w)] < 0 if andonly if x > w,                     Assume thatthe conditionexpressedby equation6 holds
the left-handside of inequalityA8 is less than                                and let Fw(w) = Fs(w) = F(w) with densityf(w) for all w.
                                                                              The expected wages are thus given by equationsAlO and
   P [DF (0)]          [DW (0)]()N     [(DS (0)](I        - o))N- I
                                                                              Al l where

   J
   00

                                                                                x(w) = (Ds(w)A1Dw
                                                                                                (w)
           [Fw (w) - Fs (w)] dw.                                       (A9)
   x                                                                                        = [1 - ps[l - F(w)]]/[l - pw[l - F(w)]],
                                                                              and
Because the conditionexpressedby equation8 implies that
   00                                                                            t(x)       = flw) ['Dr (W)]M [(w (w)]
    f [Fw (w) - Fs (w)] dw = 0,                                                                  [(Ds (w)10 -1))N-I dw.                        (A15)
    0
   0o                                                                         Because dx(w)/dw=f(w)(ps - pw)/Vtw(w)]2 < 0, equation6
   J
   x
           [Fw (w) - Fs (w)] dw <O             for all x 2 w,                 implies E(wISI > E(wIWI.
                                                                                Now consider the conditions expressed by equations7
                                                                              and 8 which imply Pw = Ps = p but Fw(w) ? FS(w). The
and
   x                                                                          expected wages are again given by equationsA10 and A 1I
   J0
           [Fw (W)- Fs (w)] dw >O              for all x < w,
                                                                              where
                                                                                        fw (w) (Ds(w)                 aln(Dw (w))Iaw
                                                                                x(w) ==
the integralin expressionA9 is negative for all x. Since all                      X()-(w (w) fs (w)                       Dln((Ds
                                                                                                                                (w)O/w
otherterms in expressionA9 are positive, inequalityA8 is
                                                                              and
satisfied:the conditionexpressedby equation8 implies that
WR is increasingin (0.                                                          t(W)       =JS(W)     PDF (W)]    PDW (W)]     [(DS (W)]l   @)N-I   dw.
                                                                                                                                               (A16)
                  OfferDistributions, ExpectedWages
OfferProbabilities,                 and
Suppose thatthe expected wage functionscould be written                       Thus, dx(w)/dw> 0 is a (sufficient)conditionguaranteeing
as                                                                            EIwIWI> EI wISI. A relatedcondition- log concavity of
                                                                              the offer distribution- arises frequentlyin the job-search
   Etw1WI         =    w x(w)       ,(w) dw/ 7x(w) t(w) dw, (AIO)             literature(Burdett1981; see also the discussion of log con-
                      WR                        WR                            cavity in Heckmanand Honor61990). However,numerical
and                                                                           examples (not reportedhere) using the normaland lognor-
                      00                00                                    mal distributions gw 2 gs andaw 2 as generate Iw1WI
                                                                                                with                             E
   EIw1SI= ,fw ,(w)dw/ Jf(w) dw,                                      (All)   > El wISI even thoughx(w) is sometimesnot monotonically
                      WR               WR                                     increasing.This suggests that a weaker (sufficient) condi-
                                                                                                            may be found.
                                                                              tion on the offer distributions
wheret(w) ? 0 for all w andx(w) is continuousand mono-
tonic. Note thatE{wlWI = E{wISI if x(w) is simply a con-
stant.To show thatE IwIWIis greater(less) thanE IwIS if
                                                      I
                                            such that
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  Action."Pp. 131-45 in Social Structureand Net-       AmericanSociological Review56:60-71.

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Montgomery, 1992 -_job_search_and_network_composition

  • 1. Job Search and Network Composition: Implications of the Strength-Of-Weak-Ties Hypothesis Author(s): James D. Montgomery Source: American Sociological Review, Vol. 57, No. 5 (Oct., 1992), pp. 586-596 Published by: American Sociological Association Stable URL: http://www.jstor.org/stable/2095914 Accessed: 21/08/2009 17:52 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=asa. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit organization founded in 1995 to build trusted digital archives for scholarship. We work with the scholarly community to preserve their work and the materials they rely upon, and to build a common research platform that promotes the discovery and use of these resources. For more information about JSTOR, please contact support@jstor.org. American Sociological Association is collaborating with JSTOR to digitize, preserve and extend access to American Sociological Review. http://www.jstor.org
  • 2. JOB SEARCH AND NETWORK COMPOSITION: IMPLICATIONSOF THE STRENGTH-OF-WEAK-TIESHYPOTHESIS* JAMEsD. MONTGOMERY NorthwesternUniversity Workersfind jobs through personal contacts (weak and strong ties) and formal sources. Alternativeformulations of the strength-of-weak-tieshypothesis suggest (1) weak ties relay job offers more frequently than strong ties, or (2) weak-tie offers are drawnfrom a better distribution.Aformal model shows that bothformulations imply a correlation between net- work composition and a job seeker's minimumacceptable wage. However, the use of a weak tie is never associated with higher expected wages under thefirstformulation, and is only sometimes associated with higher expected wages under the secondformulation. These re- sults suggest that researchers shouldfocus on job seekers' networkstructures. Based on the findingthatworkersfrequently independent for- variable.Moreover,alternative locate jobs throughacquaintances ("weak mulationsof the strength-of-weak-ties hypothe- ties") rather than close friends and relatives sis suggest thatjob seekers benefit from weak ("strong ties"),Granovetter (1973, 1974) argued ties for two distinctreasons.Granovetterempha- thatweakties play an important in determin- role sized thatweak ties relay usefuljob information ing labor-market outcomes.Subsequent theoret- more frequentlythan strongties, whereasLin's ical workin the socialresourcesliterature further formulationsuggested that weak-tie job offers emphasized the importanceof weak ties (Lin aredrawnfroma different(oftensuperior) distri- 1982). However, Bridges and Villemez (1986) bution.To examinethe empiricalimplications of and Marsdenand Hurlbert (1988) found no sig- these two formulations the strength-of-weak- of nificant relationshipbetween tie strength and ties hypothesis,I offer a formalmodel in which wages after controllingfor workercharacteris- workerslocate jobs throughboth personalcon- tics.Consequently, someresearchers haveargued tacts (weak and strongties) and formal (imper- against the strength-of-weak-ties hypothesis. sonal)methods,buildingon previousworkin the Bridgesand Villemez (1986), for example,con- economics job-search literature (Mortensen cludedthat"thestrong-weak dimensionof ties is 1986).' nottheonly, oreven themostimportant, attribute of personalrelationships the labormarket.... in THE MODEL:NETWORKSTRUCTURE Future researchshouldconcentrate exploring on AND THE RESERVATIONWAGE and otherdimensions socialresources theirrole of in thejob findingprocess"(pp. 579-80). Becausejob-seekerslackcompleteknowledgeof Reflectionsuggeststhatthe BridgesandVille- vacanciesandmustrely on information obtained mez conclusionmay be premature. Whileempir- throughvarious formal and informalchannels ical analysesof the strength-of-weak-ties hypoth- to (e.g., directapplication employers,newspaper esis havefocusedon the type of tie actuallyused ads,andpersonal economists referrals), oftencon- to locate a job (althoughsee Lai, Leung,andLin ceptualizejob searchas a sequenceof wage of- 1990), the "networksas resources"argument fers drawnrandomlyfrom an offer distribution. (Campbell,Marsden,and Hurlbert1986) sug- (Whenthe nonpecuniary aspectsof employment gests that networkstructuremay be the crucial differacrossjobs, the "wage"mightbe interpret- ed as a broaderindexof job quality.)Ifjob search * werecostlessforbothunemployed employed and Directall correspondence JamesD. Montgom- to ery, Departmentof Economics, NorthwesternUni- I Boorman(1975) and Boxman,Flap, and Weesie versity,Evanston,IL 60208. Helpfulcommentswere (1991) presentrelatedmodels of job searchthrough receivedfromPeterMarsden.Financialsupport from strong and weak ties. Halaby (1988) used a search- National Science Foundationgrant SES-9109056 is theoreticmodel to examine individuals'decisions to gratefullyacknowledged. searchfor new jobs. 586 AmericanSociological Review, 1992, Vol. 57 (October:586-596)
  • 3. JOB SEARCHAND NETWORKCOMPOSITION 587 workers, job-seekerswould acceptany offer ex- Suppose that the workerreceives some (po- ceeding theircurrent wage (or value of leisureif tentiallystochastic)numberof offers each peri- unemployed)andcontinuesearchingfor a better od. The distribution the highestoffer received of job while employed.But if job searchbecomes each periodis represented H(w), with proba- by morecostly once a workeris employed,the opti- bility densityh(w). Further, WR representthe let mal search strategyis more complex: The job worker's reservationwage and let V represent seeker sets a minimumacceptable(or "reserva- the worker's"valueof search,"i.e., the present tion")wage, rejectinganyoffersbelow thereser- value of expectedfutureearningsgiven thatthe vationwage andacceptingthe firstoffer exceed- workerremainsunemployedat the end of a peri- ing this wage (Lippman and McCall 1976; od. Given this notation,consider the worker's Mortensen1986). expectedfutureearningsviewed fromthe startof Considerthe simplestcase in whichjob search a period (before any offers are received). Be- is costless for unemployedworkersbut is pro- cause the worker'sexpectedfutureearningsare hibitivelyexpensiveforemployedworkers. Even by definitionequal to V if no offer exceeds WR if an unemployedworkerplaces no value on lei- and are equal to wI(1 - B) if the highest offer sure(so thatthecurrent "wage" zero),thework- is exceeds WR, the worker'sexpected futureearn- er might reject a low-wage offer because em- ings are ploymentwould precludefurthersearch,which might lead to a betteroffer and higher lifetime WR earnings.However,thejob-seekerwould gener- f Vh(w)dw+ | 1-B h(w)dw. (1) ally not wait to receive the maximumpossible 0 WR offer becauseearningsforegonefromrejectinga sufficiently "good"offer might exceed the net Now considertheworker'sexpectedfutureearn- expectedbenefitfromcontinuedsearch.The fact ings viewed fromtheend of thepreceding period that the job-seeker rejects relatively low-wage (after all offers were rejected). Given that the job offersbutacceptsrelativelyhigh-wageoffers workerdiscountsfutureearningsby the factorB, suggeststhe existenceof a criticalwage, i.e., the is this "valueof search" definedimplicitlyby reservation wage, at which the job-seekeris in- different between accepting employment and WR continuingthejob search. V= fjVh(w)dw+f |WB h(w) dw. (2) Now consideran unemployedworkersearch- ing for a job. Two simplifyingassumptionsare adoptedin thepresentmodel.First,I assumethat Becausetheworker indifferent is betweenaccept- theworker searchesonlywhileunemployed.2 Sec- ing a job at the reservationwage and continuing ond, I ignore the possibility of job dissolutions the job search,V = wR/(l - B). Substitutioninto such as quits, layoffs, or retirement.Thus, after equation1 yields acceptingan offer, the workeris assumedto re- main forever employed in thatjob.3 Assuming thatthe workerdiscountsnext period's income (1-B)WR=B j(W-WR) h(w) dw (3) by a factor B < 1, the present value of future R earningson a job payingwage w is thusequalto W + SW + +B... 2W = w/(I -_ ).4 whichimplicitlydefinesthe (unique)reservation wage.5 2The implicationsof on-the-jobsearcharethusleft Equation indicatesthatthe worker'sreserva- 3 for futurework (Mortensen1986, Sec. 3.1). tion wage dependson the density, h(w), of the I The model could easily be extended to permit highest-offerdistribution. Abstractingfrom the exogenously generatedjob loss so that the worker specific channelsthrough whichjob information returnsto unemploymentwith positive probability flows, economistscommonlytake this distribu- each period. tion as given (for one exception,see Mortensen 4The assumption an"infinitehorizon," of madefor the sake of mathematical tractability, implies thatthe I To derive equation3 from equation2, note that worker'sreservationwage is constantthroughtime. Unless the workeris nearretirement, presentval- the ue of lifetimeearnings(andconsequentlythe reserva- WR ?? tion wage) will be little influencedby changes in (or J dw= V- JVh(w) dw. Vh(w) even the existence of) a retirement date. 0 WR
  • 4. 588 AMERICANSOCIOLOGICAL REVIEW and Vishwanath1990). But in orderto explore thatPw > ps because a given weak tie is more the strength-of-weak-ties hypothesis,I derivethe likely to producenew information thana given highest-offerdistributionfrom more primitive strongtie.7 assumptionson the sources of job information. While Granovetter's assertionseems to im- Althoughthe analysis could be generalizedso pose a conditionon the offer probabilities, Lin's thatthe workerreceives offers from an arbitrary "strength-of-ties proposition"appears empha- to numberof sources,I assumethatthe workerre- size differences in the offer distributions. Lin ceives job informationthroughthree channels: (1982) arguedthat "strongties characterize the strongties, weak ties, and formal (impersonal) intimatesocial circle of individualswith similar search. characteristics weak ties characterize in- and the I assumethatthe workerpossesses woN weak frequent interactions peripheral and relationships ties and (1 - o)N strongties. The worker'snet- among dissimilarindividuals"(p. 134). In the work is thus describedby two parameters: size presentmodel, this suggests that the strong-tie (N)andcomposition Ineachperiod, work- (w). the and weak-tie offer distributions have the same er receives an offer througheach weak tie with mean but that the weak-tiedistribution more is probability and througheach strongtie with Pw dispersed.8 Given a lower bound on the wage probabilitypsEachweak-tiewage offeris drawn distribution, also suggeststhatweakties may Lin froma distribution Fw(w)withprobability densi- providea better(notmerelymoredispersed) dis- tyfw(w), while strong-tie offersaredrawnfroma tribution opportunities individuals of for withlow distribution Fs(w) withdensityfs(w).The worker initialpositions.9(Initialposition might referto also receives formaloffers by applyingdirectly the worker'sfather's relative wage or occupa- to M firmsduringeach period.Eachfirmmakes tional status.) Thus, beyond suggesting differ- an offer with probability formal offers are PF; ences in the dispersionof the offer distributions, drawn from a distributionFF(W) with density Lin's theoryalso implies thatthe offer distribu- fF(w). Thus, the worker's highest offer is less tions may (sometimes)be ranked.'0 thanw only if each offer receivedis less thanw. Returning the model,considerhow changes to Assuming that wage offers are drawnindepen- in the networkstructure and cl) influencethe (N of dently, the distribution the highest offer re- reservationwage (WR). (All results are proven ceived each periodcan be written in formally theAppendix.) Holdingnetwork com- position constant,the reservationwage rises as H(w)= [1 PF[1 -FF(W)]jM network size increases. Intuitively,the worker [I _pW [IFW (W)]] (N expectsmoreoffers (fromboth weak and strong ties) as N increasesandthusthe workerbecomes [1 - Ps [1 - Fs (w)]](1-(O)N. (4) more selective. AlthoughWR is unambiguously While I have so far placed no restrictions on 7To generatethis conditionendogenouslyfromthe the relationship between the offer probabilities presentmodel, one might assume thatjob offers are or offer distributions equation4, discussions in sometimes observedby dyads. Because triadbias is of the strength-of-weak-ties hypothesis by greateramongstrongties, the workeris morelikely to receive the same offer from two strong-tiefriends Granovetter (1973, 1974, 1982) and Lin (1982, thanfromtwo weak-tieacquaintances. 1990) suggest two possibilities. Granovetter 8 In the economics literature, increaseddispersion (1982, p. 105) assertedthat "ouracquaintances is typicallyformalizedas a "mean-preserving spread" ('weak ties') are less likely to be socially in- (Rothschild and Stiglitz 1970; see also Mortensen volvedwithone another thanareourclose friends 1986). Formally,the distribution H(w) is a mean-pre- ('strong ties')."6 Accordingly, since weak ties servingspreadof of(w) if are"moreproneto move in circlesdifferent from x x one's own," there is a "structural tendencyfor EHIWI = EH4w1 and dw IIH(w) > | Hf(w) dw those to whom one is only weaklytied to have 0 0 better access to job informationone does not for all x. alreadyhave" (Granovetter 1974, p. 52). In the 9Conversely,an upperboundon the offerdistribu- presentmodel, Granovetter's argument suggests tion implies thatstrongties are betterfor individuals with high initialpositions. 6 In the languageof biased networktheory,strong 10 sometimes I rankdistributions thebasisof "first- on ties areassumedto have a greater"triadbias"(Fararo orderstochasticdominance." Formally, H(w) stochas- and Skvoretz1987). tically dominatesof(w) if H(w) <!4(w)for all w.
  • 5. JOB SEARCHAND NETWORKCOMPOSITION 589 betweenthe res- increasing N, the relationship in Thus, both the condition associated with ervationwage andnetworkcomposition depends Granovetter (equation6) and the conditionsas- sociatedwith Lin (equation8, sometimesequa- on the offer probabilities offer distributions. and As shown in the Appendix, the reservation tion 7) imply thatthe worker'sreservation wage wage is increasing the proportion weak ties in of increasesas networkcompositionshifts toward (o) if relativelymore weak ties. Because the value of search,which is equal to expected futureearn- Ps [1 - Fs (w)] -Pw [I -Fw (w)] <0. (5) ings, is directlyrelatedto the reservationwage, Thecondition expressed equation impliesthat each conditionimpliesthatweak ties arebenefi- in 5 WR is increasing o) if in cial for the job-seeker.Indeed,if networkcom- position were chosen to maximize futureearn- Pw >Ps given Fw (w) = Fs (w) for all w, (6) ings, the workerwould choose an all-weak-tie or if networkwheneverthese conditionshold. Fw (w) < Fs (w) for all w given Pw =Ps. (7) THE USE OF A WEAKTIE AND Thatis, the reservationwage is increasingin the EXPECTED WAGES proportion weak ties if weak ties relayjob of- of ferswithhigherprobability strong (equa- than ties The Granovetterand Lin formulationsof the tion 6) or the weak-tieoffer distribution supe- is strength-of-weak-ties hypothesiscould be tested rior to the strong-tiedistribution(equation7). empiricallyby examiningthe reservationwage Intuitively, increasein the proportion weak an of of job-seekers:Holding networksize constant, ties makesthe worker moreselectivebecausethe does the reservation wage rise as the proportion workerexpectseithermoreor betteroffers. of weakties increases? Echoingthe"networks as The reservation wage is also increasingin the resources" argument (Campbellet al. 1986), the proportion weak ties undera second condi- of modelthussuggestsa linkbetweenthe worker's 1 tion: network structureand labor-marketoutcome. 00 00 However,insteadof focusing on networkstruc- ture, empiricalstudies of the strength-of-weak- Pw = Ps, fwfw (w) dw = f wfs (w) dw, (8) 0 0 ties hypothesishave examinedthe relationship betweenwages and the type of tie actuallyused and there exists some fv'such that to find a job (BridgesandVillemez 1986;Mars- den andHurlbert 1988).The absenceof a signif- > Fs (w) if W< fw icantrelationship betweenwages andtie strength Fw(w) = Fs (w) if w .=i aftercontrollingfor humancapitalvariableshas < Fs (w) if W> fw. led theseresearchers doubtthe relevanceof tie to strength labor-market for outcomes. Thatis, the reservationwage is increasingin the However, these "tests" of the strength-of- proportion weak ties when both types of ties of weak-tieshypothesismay be misguided.To ex- relayofferswith the sameprobability, bothoffer plorethe implications the preceding of modelfor distributionshave the samemean,andthe weak- expectedwages, some additional notationis nec- tie distribution is "more dispersed" than the essary.First,thehighest-offer distribution(equa- strong-tiedistribution. economists studying As tion 4) is re-writtenas job searchhave long recognized,increaseddis- persion of the offer distributionmakes search H (w) = L4DF(W)]M [DW(W)] (O [(Ds(W)]fI 'N, more valuable since job seekers are concerned i.e., where only with the uppertail of the distribution, thoseoffersexceedingthereservation wage.Thus, if the weak-tiedistribution moredispersed,an is (Di(wj 1 Pi [ I - F. (w)] -I increasein the proportion weak ties improves of }. for i E {IF,W,S (9) the worker'schanceof findinga high-wagejob andthusraisesthe worker'sreservation wage. The densityfunctioncan thenbe writtenas " AlthoughthisconditionimpliesthatFwis a mean- h(w) H'(w) = gF (W) + gw(W)+ gS (W), preserving spread Fs, mean-preserving of need spreads condition. not satisfy this "single-crossing" where
  • 6. 590 AMERICANSOCIOLOGICAL REVIEW characteristics. Becausethe precedingmodelab- gF (W) MpFfF (w) VPF (W)]M_ [VW (W)] (ON stracts from human capital differences across [(DS (W)] ( 01, workers,this assumption equivalentto the be- is hypothesisim- lief thatthe strength-of-weak-ties plies E{ wlW} > E{ wIS}. But analysis of equation gw (w) o(Npwfw (w) VFF (W)]M 13 demonstrates none of the conditionsas- that ON [(DW(W)] [(DS (W)] (I-o)N, sociatedwith Granovetter Lin are sufficient and and to guarantee relationship. this Indeed,as shown in theAppendix, condition the expressedin equa- gs (W) (1 - o))Npsfs (w) VFF (W)]M tion6 unambiguously impliesthe opposite:If the [(DW(W)] ON[(DS (W)] (1-(O)N-1. (10) weak-tieandstrong-tie offerdistributions the are same, E{wIW} <E{wIS} if pw > ps. Thus, if Because the worker searchesuntil receiving Granovetter correctthat weak ties are more is wage,thework- anofferexceedingthereservation likely to providenew information arestrong than er becomesemployedin a givenperiodwithprob- ties,then,holdingeverything constant, else work- ability ers findingjobs throughweak ties will receive 00 lower averagewages. | h (w) dw. Although this result holds regardlessof net- WR worksize (N), networkcomposition(o)),andthe uponemployment,the worker'sex- Conditional probability obtaininga formaloffer (PF), it is of pectedwage can be writtenas instructive considerthe specialcase in which to 00 the workerholds one tie of each type, i.e., N = 2 J wh(w)dw and o)= 1/2, and never receives offers through E{w} = WR (11) formalchannels,i.e., PF = 0. Further assumethat 00 the worker almost always receives an offer | h (w) dw throughthe weak tie, i.e., Pw is close to 1, but WR almostneverreceivesan offerthrough strong the The workeraccepts a job throughchannel i, tie, i.e., Ps is close to zero.In the periodin which where i representseither F (formal), W (weak an offer is accepted,an individualacceptinga tie), or S (strongtie), with probability job througha strong tie is thus likely to have 00 received two offers. An individualacceptinga Jg, (w) dw. job througha weak tie, on the other hand, is WR likely to have received only one offer. Because Conditionalupon employment,the probability the expectedhighestoffer increasesas the num- thatthe workeraccepts a job throughchanneli berof offersrises,the use of a weak tie impliesa can be written lower expectedwage. 00 Intuitively,then,E{wIS} exceeds E{ w1W} un- Jgi (w) dw derthiscondition(equation becausethe use of 6) Pr(i) = WR for i E {F,S,W}. (12) a weak tie indicatesthatthe workerreceived(on 0o average)fewer offersduringthe periodin which Jh (w) dw an offer was accepted.But if periods are very WR short (implying that the offer probabilitiesare Conditional upon accepting an offer through close to zero), the workeris unlikelyto receive channel i, the worker's expected wage can be several offers simultaneouslyand the use of a written weak tie reveals almostnothingaboutthe num- 00 ber of offers received.'2In the limiting case in Jwgi (w) dw E{wli}= WR foriE {F,S,W}. '2Althoughsomewhatambiguous,periodlengthin oo the precedingmodelprobablybest corresponds the to |g, (w)dw (13) WR amountof time ajob-seekerhas to respondto a firm's offer. When periodsare long, the workeris likely to Researchershave assumedthat the strength- hold severaloffers simultaneously.As periodlength of-weak-tieshypothesisimpliesthatworkersob- approacheszero (implying that the job-seeker must tainingjobs throughweak ties should receive immediatelyaccept or reject each offer), the proba- higherwages aftercontrollingfor humancapital bility of multipleoffers becomes negligible.
  • 7. JOB SEARCHAND NETWORKCOMPOSITION 591 which periodlength is infinitesimal,the worker 5 butrejectanofferof 1. Now considerthe work- will receive at most one offer (throughall chan- er's expectedwage conditioned thetype of tie on nels) in each period.In this case, holdingevery- used. Because strong-tieoffers will only be ac- thingelse constant,E{wIW}= E{wIS . ceptedif w = 5, E IwISI = 5. But the workerwill While equation 6 always implies E{ wIS > accepta weak-tieofferof either4 or 5. Assuming E{wIW, theconditions associated withLin(equa- thatthe worker randomly choosesbetweenoffers tions 7 and 8) do not permit an unambiguous if boththe strongtie andweaktie offersareequal ranking the meanwages. Two examplesdem- of to 5, E{wIW}= 4.7 <5= E(wIS}. onstrate these conditionsareconsistentwith that E{wIS} > E{wIW}.To make these examples as Spread Example2: Mean-Preserving transparent possible, I assume that the wage as offers are discreterandomvariables.However, To show that the conditionexpressedby equa- examplesin whichoffersaredrawnfromcontin- tion 8 is also consistent with the relationship uous distributions could be constructed prove to E IwIS > E IwIW},I againassumeN= 2, X = 1/2, the same point. andPF = 0. Further assumethatstrong-tieoffers aredrawn froma three-pointdistribution which in Example1: StochasticDominance fs (1)= 1/4, fs (3)= 1/2, fs (5)= 1/4, (18) Assume thatthe workerhas one tie of each type and never receives offers throughformalchan- andthus, nels, i.e., N = 2, X = 1/2, andPF = 0. Furtheras- 0 forw< 1 sumethatwage offersfromstrongties areequal- ly likely to be either 1 or 5: Fs(w)= 1/4 for l< w < 3 3~/4 for3? w<5 1 forw?5. (19) fs (1)=fs (5)= 1/2. (14) Assume thatweak-tieoffers aredistributedsuch Thus, the cumulativedistributionof strong-tie that offerscan be written fw(1) =fw(2) =fw(4) =fw(5) = 1/4, (20) 0 forw< 1 Fs(w)= 1/2 for I< w<5 andthus, 1 for w > 5. (15) 0 forw< 1 Assumethatoffersfromweakties aredrawn from a three-point in distribution which 1/4 forl<w<2 Fw(w) 1/2 for2< w<4 fw (1) = fw (4) = 1/4., fw (5) = 1/2. (16) 3/4 for4< w<5 I forw?5. (21) This implies the following cumulativedistribu- Comparingthe distribution functions,Fw(w) > tion of weak-tieoffers: Fs(w) for w < 3 and Fw(w) < Fs(w) for w ? 3. BecauseE{w I = 3 forbothdistributions, con- the 0 forw< 1 ditionexpressedby equation8 holds:Fw(w)is a F. -) 1/4 forl< w<4 "mean-preserving of spread" Fs(w). 1/2 for4< w<5 Assuming B=.9 andp= .5,WR= 3.538. In this 1 forw?5. (17) case, as in example 1, the workeraccepts only Comparing cumulativedistributions, is ap- offersof 4 or 5. Becauseonly strong-tie the it offersof parent that Fw(w) "stochastically dominates" 5 are acceptable,E{ wIS) = 5. Again assuming Fs(w):Fw(w) < Fs(w) for all w. AssumingPw = thatthe workerchooses randomlywhen receiv- Ps = p, the conditionexpressedin equation7 is ing offersof 5 through bothweakandstrongties, thussatisfied. E{wIW)= 4.517 < 5 =E{wIS}. Given assumptions Bandp, the reservation on wage andmeanwages can be calculated. ex-For Although theseexamplesestablish thecon- that ample,supposeB= .8 andp = .5. Using Appendix ditions expressedby equations7 and 8 are not equationAl (or the discreteanalog of equation theoretically with the negativefind- inconsistent 3), the reservationwage is WR= 3.280. In this ings reportedby Bridges and Villemez (1986), case, the workerwill acceptanofferof either4 or alternative distributional assumptions imply
  • 8. 592 AMERICANSOCIOLOGICAL REVIEW E( wIWI> Ef wIS Inthenextexample,I assume empirical evidence. Although little is known 1. thatwage offers are distributed lognormally. aboutthe shapeof actualoffer distributions, ex- amplesusing the lognormal(andother)distribu- Example3: LognormalOfferDistributions tions suggest that the use of a weak tie should imply higherexpectedwages when the weak-tie Assume that the offer distributions lognor- distribution eithermoredispersedor stochasti- are is mal with means ,UF .75, gw = Us = 1, and stan- cally dominant. = darddeviationsaF = 6W= 1, (s = .75. The weak- Lin's hypothesismightbe reconciledwith the tie distribution thus stochastically dominatesthe empiricalevidence by assumingthatbothof the formal distributionand is a mean-preserving conditionsassociatedwith Granovetter Lin and spreadof the strong-tiedistribution. Assuming hold: Pw > Ps and Fw(w) is superiorto Fs(w). PF=PW=PS = 1,N=6, 0)=.5,M= 8, andB3=.8, Because I have proventhatthe use of a weak tie it can be shown thatWR = 1.884 and implies lower wages given Pw > Ps and suggest- ed that a superiorweak-tie distribution implies Et wIW = 4.185 > Et wIF I = 3.821 higherwages,thesetwo effectsmightoffseteach other. However, as the next example suggests, > E(wIS I = 3.159. the magnitudeof the negativeeffect is likely to be quitesmall (andmay be statistically insignifi- Undereitherequation7 or 8, i.e., Fw stochasti- cant in empiricalwork). Thus, the effect of dif- cally dominatesor is a mean-preserving spread ferences in the offer distributionsis likely to of Fs, it seems likely thatE(wIWI> E(wISIfor a swampany effect due to differencesin the offer large class of distributions.)3 Although I have probabilities. made little progressdefining this class analyti- Althoughresearchers havebeen unableto find cally, a rather strongconditionon the offerdistri- a significantrelationship betweenwages andthe butionsthatguarantees inequality present- use of a weak tie after controllingfor human this is ed in the Appendix. capital variables, both Bridges and Villemez (1986) and Marsdenand Hurlbert (1988) report EMPIRICAL IMPLICATIONS a positive zero-order correlation.If, as Bridges and Villemez suggest, humancapital variables The precedinganalysissuggeststhatthe conclu- areproxiesfor social capitalformation, zero- the sion reachedby BridgesandVillemez (1986) ordercorrelationmight be explainedby differ- thattie strength a relativelyunimportant is factor ences in network structureacross workers.To in labor marketsuccess - may be premature. see this, considera final example in which the Supposethatweakties arebeneficial becausethey conditionassociatedwithGranovetter holds,i.e., are more likely to relay job information as Pw> Ps , while the conditionassociatedwith Lin Granovetter suggests. In this case, I have estab- does not, i.e., Fw(w) = Fs(w) for all w. Assume lished that the worker'sreservationwage (and wage offers are drawnfrom lognormaldistribu- thus expected futureearnings)rises as the pro- tions with meansR = gw = gS = 1 andvariances portionof weak ties in the worker'snetworkin- a, = a'w = a's = 1. Furtherassume M = 6, B =.8, creases.But althoughnetworkcompositionis an andpw = .2 > Ps = .1 > PF = .05. The worker's important determinant labormarketsuccess, reservation expectedwages given severalal- of and the use of a weak tie does not imply higherex- ternativeassumptionson the size and composi- pectedwages. tion of the worker's network are presentedin While I have shown thatthe use of a weak tie Table 1. is consistent with lower expected wages even This example illustratesresultsalreadyestab- when weak-tieoffers are drawnfrom a superior lished:Individualswith large networksand/ora distribution, Lin's (1982) "strength-of-ties prop- large proportion weak ties in their networks of osition" is more difficult to reconcile with the will set relativelyhigh reservation wages. In this example,suchindividuals also receiverelatively 13 In the limitingcase in which the workerreceives highexpectedwages. Thisrelationship consis- is at most one offer (throughall channels)in each peri- tent with the findingsof Campbellet al. (1986): od, it is straightforward proveEs wlW) > Es wiS) if Individuals highsocioeconomic to of statusarelike- weak-tieoffersaredistributed uniformly [a,b]while ly to have largerbut less tightly knit networks in strong-tieoffers areuniformin [c,d] wherea + b > c + thanindividuals low socioeconomic of status.But d and b> d. while Et w I is increasingin N and co,Et wIW}is
  • 9. JOB SEARCHAND NETWORKCOMPOSITION 593 Table 1. ReservationWages, Expected Wages, and Prob- ture,heterogeneity thepopulation in thusinduces ability of Using Search Method by Network EtwIW} > EtwIS}. This result is driven by the Structure differences in the proportionsPr(W)and Pr(S) Network Structure across workertypes: Workerswith a large pro- portion weakties (andthushighexpectedwag- of Wagesand N=3 N=3 N=6 N=6 Probabilities cl)= 1/3 clo=2/3 co= 1/3 cl)= 2/3 es) are much more likely to use weak ties (and less likely to use strongties). Reservation WR 1.679 1.804 2.125 2.310 In this analysis, I have contrastedalternative wage informaljob-finding methods - weak versus Expected E{wI 3.847 4.031 4.513 4.785 strong ties - ratherthan informaland formal wage methods. However, given the symmetryof the Expectedwage conditionalupon using a model with respect to each of the job-finding Formal E{wIFI 3.858 4.046 4.525 4.800 methods,the analysisis easily generalized.Par- method allelingBridgesandVillemez (1986), Corcoran, Weak tie E{wIW} 3.830 4.019 4.502 4.779 Datcher,and Duncan (1980) found that the use Strongtie E{wIS} 3.849 4.037 4.517 4.793 of a personalcontactis not associatedwith high- Probabilityoffinding job througha er wages and concluded that such contacts are Formal Pr(F) .425 .371 .271 .229 unimportant labor marketsuccess. But if in- in method formalandformaloffersaredrawn fromthe same Weak tie Pr(W) .290 .505 .367 .618 distribution, differencesshould be expected no Strongtie Pr(S) .285 .124 .363 .153 in the averagewage acrossjob-findingmethods used.Networkstructure, however,shouldbe cor- relatedwith wages if personalcontactsincrease the offer arrivalrate. equalto Et wISI for each network approximately structure.14 CONCLUSION Assume that the labor force comprises two typesof workers: have small,mostly strong- half Bridges and Villemez (1986) argued that tie tie networks(N = 3, co= 1/3) while the otherhalf strengthis not an important dimensionof social havelarge,mostlyweak-tienetworks(N = 6, co= capitalbecausetheyfailedto find a positiverela- 2/3). The formergroupis represented column by tionshipbetweenthe use of a weaktie andwages 1 in Table 1 andthe lattergroupis representedby after controllingfor workercharacteristics. My column 4. The mean wages for the population analysis, based on an economic model of job can be written search,suggeststhatthis conclusionmay be pre- mature. Alternative of formulations the strength- E (wIW} = SPr(W)EIwIWI of-weak-ties hypothesis suggest that weak ties X Pr(W) may be beneficial for two distinct reasons. Granovetter emphasized weakties relayuse- that (.290)(3.830) + (.618)(4.779) ful job information more frequentlythan strong .290 + .618 ties, whereas Lin's formulation suggests that = 4.476; weak-tiejob offers are drawnfrom a different (oftensuperior) AlthoughLin's for- distribution. mulationseems difficult (althoughnot theoreti- E IwISI = EPr(S) Et wISI cally impossible)to reconcilewith the empirical I Pr(S) evidence on wages, Granovetter'sformulation -(.285)(3.849) + (.153)(4.793) implies that the use of a weak tie will be nega- .285 + .153 tively (although perhapsweakly)relatedto aver- = 4.179, age wages. My analysis suggests that researchers should where the summationsare taken over worker devotemoreattention therelationship to between for types.Intheabsenceof controls network struc- networkstructureand labor-market outcomes. The relationship betweenwages andthe use of a 14 This resultwould still hold if the common offer particular job-findingmethodmay be counterin- distribution improvesas N or corises as suggestedby tuitive:The use of a weaktie couldbe associated Lin's (1982) "strength-of-positions proposition." with lower wages even though weak ties relay
  • 10. 594 REVIEW AMERICANSOCIOLOGICAL offersmorefrequently thanstrongties andweak- Appendix tie offersare(on average)superior offersfrom to othersources.However,the presentmodel pre- NetworkStructureand the ReservationWage dicts an unambiguous relationshipbetween res- Integrating parts,equation3 may be rewrittenas by ervation wages and network structure:Both ,00 Granovetter's and Lin's formulations of the (1-B)wRH ={ f l-H(w)dwj ' (Al) strength-of-weak-ties hypothesisimply that the tWR) reservation wage rises as the proportion weak of wherewWH the reservation is wage corresponding theH(w) to ties in a job-seeker'snetworkincreases. distribution. Consideran alternativeoffer distribution,M(w),where Economicmodels of job searchseem to offer 00 00 a useful framework examinationof the rela- for f I - H(w) dw > | I - M(w) dw for all x, (A2) tionshipbetweensocialnetworksandlabor-mar- x x ket outcomes.By relaxingseveralof the simpli- or stateddifferently, fying assumptionsadoptedin the presentanaly- 00 sis, researchers could addressa varietyof other J H(w) - H(w) dw <0 for all x. (A3) x issues raisedin the strength-of-weak-ties litera- wage for the M(w)distribu- Let wHrepresent the reservation ture. Extendingthe model to permiton-the-job tion so that searchwould allow examination the relation- of ship betweenthe type of tie used, priorwage (or (1-awe=~ fJ1- (w) dwj. (A4) prestige), thecurrent and wage (Wegener1991).'5 tR) Further,by specifying the costs of searching I establishwiH> wf If Hby contradiction. wWH WH, inequal- < through alternativechannels(as in Holzer 1988), ity A2 implies that researchers could examineGranovetter's (1974, 00 00 00 p. 54) claim that unemployedjob-seekers are morelikely thanemployedjob seekersto turnto f 1 -Hw) dw < f 1 H(w) dw < f I-H(w) dw (AS) WR WR WR their strong ties.'6 Alternatively,contact status could be incorporated the model to evaluate in Thus, the right-hand side of equationAl exceeds the right- Lin's (Linet al. 1981;Lai et al. 1990) pathanal- hand side of equationA4. However, underthe assumption that w H < WH, the left-handside of equationA4 must (at yses. Finally,following Marsdenand Campbell least weakly)exceed the left-handside of equationAl. This (1990), future researchcould incorporateboth contradictionestablishes that w H cannot be less than or sides of the labormarket employersas well as - equal to (i.e., must exceed) wRf. workers- into the analysis. Once recruitment SupposethatH(w) represents offer distribution the given methods and wage determinationare endog- networksize NH and f(w) representsthe distribution given enized,researchers couldexaminetheinteraction networksize NL whereNH > NL.Fromequation9, betweensocial networkstructure the income and H(w) - Hf(w)= H(w) [['14W(W)I)(NH -NL) distribution (Mortensenand Vishwanath' 1990; Montgomery1990, 1991a, 1991b). [(T>S(W)](l-())(NHNL) _- I] (A6) JAMESD. MONTGOMERY AssistantProfessorof Eco- is Because the bracketedexpression is negative for all w, nomicsand a FacultyFellow at the Centerfor Urban inequality A3 holds. Holding network composition con- Affairsand Policy Researchat Northwestern Univer- stant, the reservationwage is thus increasing in network sity. In his research he explores the relationshipbe- size. tween social networksand labor-marketoutcomes, Now let M(w) representthe highest-offer distribution attemptingto integrate economic and sociological when the workerhas 0N weak ties and (1 - o)N strongties; conceptionsof labor markets.Building upon ethno- H(w) representsthis distributionwhen the workerhas one graphicaccountsof urbanpoverty,he is also working additionalweak tie (and thus one less strongtie). Equation 9 implies to develop rational-choice models of "underclass" behavior. H(w) - M(w) = [(Dw(w) - (Ds(w)] H(w) (A7) (Ds(w) 15 Note that a job-seeker's currentposition may Because H(w)/'Ds(w) is always positive, H(w) - M(w)is also influence networkstructure, offer distributions, negative (and thus WR is increasingin w) if the bracketed and offer probabilities. expression - which is rewrittenas ps[l - Fs(w)] - Pw[l- 16 The increaseduse of strongties may be relatedto Fw(w)] in equation5 - is negative. Holding networksize liquidityconstraintsfaced by unemployedjob seek- constant,the conditionexpressedby equation5 implies that ers, which imply that the reservationwage is falling the reservationwage increases as the proportionof weak over time (Mortensen1986, pp. 859-61). ties increases.
  • 11. JOB SEARCHAND NETWORKCOMPOSITION 595 Now assumethe conditionexpressedby equation8 holds 00 and let Pw = ps = p. From inequalityA3 and equationA7, fw [x(w) - x(w)] ,(w)dw WR is increasingin 0) if WR 0o 00 x J p [Fw (w) - Fs (w)] ['tF (W)]M [I (W)]WN > w|[x(w) - x(w)] ,(w)dw = O WR if dx(w) / dw > O [(DS(W)](' - co)N-IdW < 0 for all x. (A8) 0o <w J[x(w) - x(w2)] ,(w)dw = 0 if dx(w) / dw < 0. Because the last three terms in the integrandare positive WR (A14) andincreasingin w, andbecause the conditionexpressedin equation8 implies [Fw (w) - Fs (w)] < 0 if andonly if x > w, Assume thatthe conditionexpressedby equation6 holds the left-handside of inequalityA8 is less than and let Fw(w) = Fs(w) = F(w) with densityf(w) for all w. The expected wages are thus given by equationsAlO and P [DF (0)] [DW (0)]()N [(DS (0)](I - o))N- I Al l where J 00 x(w) = (Ds(w)A1Dw (w) [Fw (w) - Fs (w)] dw. (A9) x = [1 - ps[l - F(w)]]/[l - pw[l - F(w)]], and Because the conditionexpressedby equation8 implies that 00 t(x) = flw) ['Dr (W)]M [(w (w)] f [Fw (w) - Fs (w)] dw = 0, [(Ds (w)10 -1))N-I dw. (A15) 0 0o Because dx(w)/dw=f(w)(ps - pw)/Vtw(w)]2 < 0, equation6 J x [Fw (w) - Fs (w)] dw <O for all x 2 w, implies E(wISI > E(wIWI. Now consider the conditions expressed by equations7 and 8 which imply Pw = Ps = p but Fw(w) ? FS(w). The and x expected wages are again given by equationsA10 and A 1I J0 [Fw (W)- Fs (w)] dw >O for all x < w, where fw (w) (Ds(w) aln(Dw (w))Iaw x(w) == the integralin expressionA9 is negative for all x. Since all X()-(w (w) fs (w) Dln((Ds (w)O/w otherterms in expressionA9 are positive, inequalityA8 is and satisfied:the conditionexpressedby equation8 implies that WR is increasingin (0. t(W) =JS(W) PDF (W)] PDW (W)] [(DS (W)]l @)N-I dw. (A16) OfferDistributions, ExpectedWages OfferProbabilities, and Suppose thatthe expected wage functionscould be written Thus, dx(w)/dw> 0 is a (sufficient)conditionguaranteeing as EIwIWI> EI wISI. A relatedcondition- log concavity of the offer distribution- arises frequentlyin the job-search Etw1WI = w x(w) ,(w) dw/ 7x(w) t(w) dw, (AIO) literature(Burdett1981; see also the discussion of log con- WR WR cavity in Heckmanand Honor61990). However,numerical and examples (not reportedhere) using the normaland lognor- 00 00 mal distributions gw 2 gs andaw 2 as generate Iw1WI with E EIw1SI= ,fw ,(w)dw/ Jf(w) dw, (All) > El wISI even thoughx(w) is sometimesnot monotonically WR WR increasing.This suggests that a weaker (sufficient) condi- may be found. tion on the offer distributions wheret(w) ? 0 for all w andx(w) is continuousand mono- tonic. Note thatE{wlWI = E{wISI if x(w) is simply a con- stant.To show thatE IwIWIis greater(less) thanE IwIS if I such that x(w) is increasing(decreasing)in w, define wv REFERENCES 00 00 x(wv) (w) dw ,f = ,fx(w) 4(w) dw. (A12) Boorman,Scott A. 1975. "A Combinatorial Optimi- WR WR zation Model for Transmission Job Information of throughContactNetworks."Bell Journal of Eco- Given the conditionson x(w) and4(w), a uniquew E (WR ,??) nomics 6:216-49. always exists. Multiplyboth the numerator denomina- and Boxman, Ed, Henk Flap, and Jeroen Weesie. 1991. torof equationA 1 by x(w). Subtracting fromequation this "Social Capitaland InformalJob Search."Depart- AlO yields the condition mentof Social Sciences,Universityof Utrecht,The ElwiWI >Ejw1SI if and only if Netherlands. Unpublishedmanuscript. 00 Bridges, William P. and Wayne J. Villemez. 1986. f w [x(w) _x(wA)] dw > 0. 4(w) (A13) "InformalHiring and Income in the Labor Mar- WR ket."AmericanSociological Review51:574-82. given the conditionson x(w) and 4(w), Further, Burdett,Kenneth.1981. "A Useful Restrictionon the
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