The Changing Significance of Ties

Abstract

This article explores the relative change in significance among various means of getting a job in Russia in the period of transition from state socialism. The article argues that the transition neither makes personal connections obsolete nor transforms them in a market-like fashion. In accordance with the path dependency argument, they persist strongly while formal labor market mechanisms are weakened by the devaluation of workers' formal credentials as a hiring criterion. The authors' theoretical propositions are supported by empirical analyses based on ethnographic and survey data collected in four Russian cities. Unstructured interviews indicate that the specific skills acquired by job candidates through the formal education system have a minor impact on hiring decisions. At the same time, personal connections preserve their influence and are being formally incorporated in decision-making. We treat the channels of help, channels of information and the formal market as alternative means of a getting a job described by a competing risk event history model with repeated events. The model confirms that the informal channels persist while the formal labor market is shrinking, although the relative increase in the value of personal contacts vis-a-vis the formal market is statistically insignificant. The shrinkage of the formal labor market becomes negligible when we control for the interaction of the educational credentials and the start of the reform period. Thus, this phenomenon can be primarily attributed to the diminished role of educational credentials.