Labor Market Implications of Weak Ties

Abstract

1. IntroductionMany of us have heard the phrase it's not what you know but who you know. While this may not be strictly true, approximately one half of workers in the United States do find employment through friends, relatives, and other social contacts (Granovetter 1995). Further, in a seminal paper, Granovetter (1973) argues that, for the purpose of finding jobs, it is acquaintances, not close friends, who are most important in helping individuals find employment. He claims that friends whom one knows well are likely to be close in social space. Close friends know one's other close friends and tend to have social networks similar to each other. Thus, any information held by a given close friend may be obtained from other close friends as well; the job information of close friends is often redundant. In contrast, acquaintances tend to have less similar social networks and know different people from one's close friends. Granovetter argued that acquaintances also are more likely to have different information about available jobs, which makes them valuable job contacts. Granovetter labeled acquaintances as weak ties as opposed to close friends, who are known as strong ties.In this article, I am defining weak and strong ties as Granovetter (1983) did. Weak ties are acquaintances and strong ties are close friends. The important point of these definitions is the idea that, on average, acquaintances are less likely to know one's other friends than strong ties. On average, the social network of strong ties has more overlap than the social network of weak ties. As I will explain in more detail below, the lack of overlap of acquaintances implies that a social network with more weak ties will be larger (will have more range) than a social network with fewer weak ties.Since Granovetter's article, much work has been done by other scholars to validate the importance of weak ties in labor markets by answering two questions: First, researchers asked whether weak ties are a common source of finding employment. These studies have been successful in demonstrating that weak ties are indeed an important source of finding employment. For instance, in Granovetter (1973), of the people finding jobs through referral sources (such as friends, family, and other personal contacts), 27.8% use weak ties, 16.7% use strong ties, and the majority, 55.6%, use ties of moderate strength in between weak and strong. Others have replicated the finding that weak ties are a common means of finding employment.1 In summary, this line of research has demonstrated that, as Granovetter claimed, weak ties do play an important role in matching workers and jobs. Second, because weak ties appear to be important in locating jobs, researchers have asked if the use of weak ties as a job-finding method increases income (Bridges and Villemez 1986; Marsden and Hurlbert 1988; Wegener 1991). The findings of these studies suggest that there is little evidence of a relationship between weak ties and income. (Note that the hypothesized link between weak ties and income was not a part of Granovetter's hypothesis, as he makes clear in Granovetter [1983].)The present article can be seen as an extension to this second line of questioning. In this article, I use an example to show that previous methods used to measure the effect of weak ties on income will underestimate the effect, if it exists. I then provide a new method of estimating the effect of weak ties on income that directly considers the social network of individuals. Granovetter's idea that weak ties are more likely to provide novel information rests on the idea that weak ties are less likely to overlap than strong ties, on average. In other words, weak ties know a smaller fraction of one's other friends compared with strong ties, on average. I use this idea to show that less overlap in friendships increases the range of an individual's social network. …