Essays on Formation and Use of Job-Contact Networks

David S. Powers

Advisor: Daniel E Houser, PhD, Department of Economics

Committee Members: Cesar A. Martinelli, Garett B. Jones, David Eil

Vernon Smith Hall (formerly Metropolitan Building), #5075
November 29, 2017, 10:00 AM to 12:00 PM

Abstract:

This dissertation contributes to the understanding of job-contact network formation and utilization under varying job-market conditions.  It is composed of three chapters, each of which examines different aspects of networking in the pursuit of employment.  This work studies the impact of job-market conditions on the effectiveness of social ties in obtaining jobs and on peoples’ chosen networking behavior.  It examines the incentives for linking and information sharing, and it highlights individual and policy actions that may facilitate worker-employer matching.

The first chapter, entitled, “Network-Formation Theory, Experiments, and an Application to Job Contacts,” discusses literature related to the conceptualization of networks, network use and endogenous network formation, reporting on a group of theoretical and empirical works related to job markets, matching and networking.  The chapter focuses on a particular application:  job-contact networks.  It presents examples showing the widespread use of social contacts for finding jobs around the world, and it compares the related costs and benefits to those from common public policies that aim to create jobs and facilitate job matching.

The second chapter, entitled, “A Laboratory Test of Endogenous Job-Contact Networks,” describes a laboratory implementation and evaluation of endogenous job-contact or job-sharing networks under varying job-market conditions.  Specifically, it tests for a non-monotonic relation between the job separation rate (or job offer rate) and peoples’ choices of network investment, which consequently affects the likelihood of finding jobs through social networks.  The experiment outcomes are examined under multiple linking-cost levels, group sizes, and information levels, and post-experiment questionnaire responses are also evaluated.

The third chapter, entitled, “Extensions of Job-Contact Networks in the Laboratory,” describes and tests three augmentations of a benchmark job-contact networks setup which step beyond formal theory (to date) in order to rule out some alternative explanations of laboratory-observed phenomena and to assess the overall robustness of the benchmark results.  The chapter closes with a discussion motivating further model development and/or experimentation related to job-contact networks in the future.