"The collection contains an incredibly rich amount of information, historical background, statistics, and ideas. It provides a significant contribution to our understanding of social reproduction, economic inequality, poverty, and the institutional mechanisms that shape wealth inequality. This book should be of interest to a broad audience."
- CONTEMPORARY SOCIOLOGY

"Assets for the Poor makes an important contribution to the debate on how the wealth-creating opportunities available to upper- and middle- class Americans can be extended to low income families. Many critical issues of asset development are discussed in this important book, which will be an essential resource for anyone concerned about the twin problems of poverty and inequality in American society today."
-JAMES MIDGLEY, University of California, Berkeley

"For those already convinced of the importance of assets for poor families, this comprehensive compendium will add breadth and depth. For those wavering as to whether asset-based policies are a useful anti- poverty tool, this book is likely to win you over."
- JARED BERNSTEIN, Economic Policy Institute, Washington, D.C.

'Assets for the Poor is the scholarly treatise on America's 'third revolution,' the movement to democratize capitalism. While the first struggle overcame foreign tyranny and the second defeated slavery to usher in an extended era of civil rights, the coming revolution will be over economic justice... an effort to secure for all families a share in the fruits of our democracy."
-J. LARRY BROWN, Brandeis University

Over the past three decades, average household wealth in the United States has declined among all but the richest families, with a near 80 percent drop among the nation's poorest families. Although the national debate about inequality has focused on income, it is wealth—the private assets amassed and passed on within families—that provides the extra economic cushion needed to move beyond mere day-to-day survival. Assets for the Poor is the first full-scale investigation into the importance of family wealth and the need for policies to encourage asset-building among the poor.

Assets for the Poor shows how institutional mechanisms designed to encourage acquisition of capital and property favor middle-class and high-income families. For example, the aggregate value of home mortgage tax deductions far outweighs the dollar amount of the subsidies provided by Section 8 rental vouchers and public housing. Banking definitions of creditworthiness largely exclude minorities, and welfare rules have made it nearly impossible for single mothers to accumulate savings, let alone stocks or real estate. Due to persistent residential segregation, even those minority families who do own homes are often denied equal access to better schools and public services.

The research in this volume shows that the poor do make use of the assets they have. Cash gifts—although small in size—are frequent within families and often lead to such positive results as homebuying and debt reduction, while tangible assets such as tools and cars help increase employment prospects. Assets for the Poor examines policies such as Individual Development Account tax subsidies to reward financial savings among the poor, and more liberal credit rules to make borrowing easier and less costly. The contributors also offer thoughtful advice for bringing the poor into mainstream savings institutions and warn against developing asset building policies at the expense of existing safety net programs.

Asset-building for low-income families is a powerful idea that offers hope to families searching for a way out of poverty. Assets for the Poor challenges current thinking regarding poverty reduction policies and proposes a major shift in the way we think about families and how they make a better life.

THOMAS M. SHAPIRO is professor of sociology at Northeastern University.

EDWARD N. WOLFF is professor of economics at New York University.

CONTRIBUTORS: Richard V. Burkhauser, John Sibley Butler, Stacie Carney, Dalton Conley, Nancy A. Denton, Kathryn Edin, William G. Gale, Robert Haveman, Lelvin L. Oliver, Laurence S. Seidman, Thomas M. Shapiro, Michael Sherraden, Seymour Spilerman, Mark J. Stern, Robert Weathers, Mark O. Wilhelm, Edward N. Wolff

A Volume in the Ford Foundation Series on Asset Building

Classical economic theory assumes that people in risk situations follow a course of action based on a rational, consistent assessment of likely outcomes. But as Zur Shapira demonstrates in Risk Taking, corporate managers consistently stray from the prescribed path into far more subjective territory. Risk Taking offers a critical assessment of the relationship between theory and action in managerial decision making.

Shapira offers a definitive account of the classical conception of risky decision making, which derives behavioral prescriptions from a calculation of both the value and the likelihood of possible outcomes. He then demonstrates how theories in this vein have been historically at odds with empirical observations. Risk Taking reports the results of an extensive survey of seven hundred managers that probed their attitudes and beliefs about risk and examined how they had actually made decisions in the face of uncertainty. The picture that emerges is of a dynamic, flexible process in which each manager’s personal expertise and perceptions play profound roles.

Managerial strategies are continually modified to suit changing circumstances. Rather than formulating probability estimates, executives create potential scenarios based not only on the possible outcomes but also on the many arbitrary factors inherent in their own situations. As Shapira notes, risk taking propensities vary among managers, and the need to maintain control and avoid particularly dangerous results exercises a powerful influence. Shapira also examines the impact of organizational structure, long-term management objectives, and incentives on decision making.

With perceptive observations of the cognitive, emotional, and organizational dimensions of corporate decision making, Risk Taking propels the study of managerial risk behavior into new directions. This volume signals the way toward improving managerial decision making by revealing the need for more inclusive choice models that augment classical theory with vital behavioral observations.

ZUR SHAPIRA is research professor of management and organizational behavior at the Stern School of Business at New York University.

"This volume is the first to examine how public policy aimed at education, income support, welfare, housing, civil rights, and employment may affect health. Since the existing strategy of devoting an increasing share of resources to medical care is at the point of diminishing returns and cannot be sustained in the long run, the approach promoted by this seminal collection deserves and is certain to receive growing attention."
-CHOICE

"In the next fifteen years, baby boomers will enter the elderly population and the number of people over sixty-five in the United States will have doubled, a crisis that will dramatically overwhelm our medical care system. Making Americans Healthier offers crucially important ideas about how we must deal with this challenge."
-S. LEONARD SYME, emeritus professor of epidemiology and community health, School of Public Health, University of California, Berkeley

"This is an absolute must-read book for anyone interested in how government policies can improve population health and reduce health disparities. Throughout most of the twentieth century, developed nations focused almost exclusively on the development of health care services, drugs and technology to cure acute illnesses and chronic disease. In contrast, the twenty-first century promises a much more deliberative effort to understand, endorse, and disseminate social and economic policy to promote health and prevent the onset of illness. Making Americans Healthier provides the keys for opening that prevention door by providing an up-to-date critique and thorough examination of how non-health policies targeted on social and economic problems have impacted population health."
-COLLEEN M. GROGAN, associate professor, School of Social Service Administration, and academic dean, Graduate Program in Health Administration and Policy, University of Chicago

The United States spends billions of dollars annually on social and economic policies aimed at improving the lives of its citizens, but the health consequences associated with these policies are rarely considered. In Making Americans Healthier, a group of multidisciplinary experts shows how social and economic policies seemingly unrelated to medical well-being have dramatic consequences for the health of the American people.

Most previous research concerning problems with health and healthcare in the United States has focused narrowly on issues of medical care and insurance coverage, but Making Americans Healthier demonstrates the important health consequences that policymakers overlook in traditional cost-benefit evaluations of social policy. The contributors examine six critical policy areas: civil rights, education, income support, employment, welfare, and neighborhood and housing. Among the important findings in this book, David Cutler and Adriana Lleras-Muney document the robust relationship between educational attainment and health, and estimate that the health benefits of education may exceed even the well-documented financial returns of education. Pamela Herd, James House, and Robert Schoeni discover notable health benefits associated with the Supplemental Security Income Program, which provides financial support for elderly and disabled Americans. George Kaplan, Nalini Ranjit, and Sarah Burgard document a large and unanticipated improvement in the health of African-American women following the enactment of civil rights legislation in the 1960s.

Making Americans Healthier presents ground-breaking evidence that the health impact of many social policies is substantial. The important findings in this book pave the way for promising new avenues for intervention and convincingly demonstrate that ultimately social and economic policy is health policy.
 

ROBERT F. SCHOENI is professor of public policy and economics, the University of Michigan.

JAMES S. HOUSE is Angus Campbell Collegiate Professor of Sociology and Survey Research, the University of Michigan.

GEORGE A. KAPLAN is the Thomas Francis Collegiate Professor of Public Health, the University of Michigan.

HAROLD POLLACK is associate professor of social service administration, University of Chicago.

CONTRIBUTORS: Marianne P. Bitler, Jeanne Brooks-Gunn, Sarah A. Burgard, Janet Currie, David M. Cutler, Rebecca C. Fauth, Irv Garfinkel. Ben B. Hansen, Pamela Herd, Hilary Hoynes, Daniel Keating, Jean Knab, Adriana Lleras-Muney, Sara McLanahan, Jeffrey D. Morenoff, Enrico Moretti, Theresa L. Osypuk, Richard H. Price,  Nalini Ranjit, Ana V. Diez Roux, Christopher J. Ruhm, Sharon Z. Simonton.

A Volume in the National Poverty Center Series on Poverty and Public Policy

"In the 'war of the models' between variants of capitalism, the Dutch economy has had good and bad publicity. There is the 'Dutch disease' that prices manufacturing out of some markets and criticisms of Dutch collective bargaining as being insufficiently centralized or decentralized. There is also much ballyhoo about the virtues of the Polder model and Dutch economic planning. By examining how the Dutch have dealt with less skilled and low-wage work, Low-Wage Work in the Netherlands illuminates how the Dutch system operates to deal with a problem that affects all economies. The depth of discussion of specific industries and workers offers more insight into how the Dutch do it than the broad generalizations that abound in analyses of the varying capitalist models."
-RICHARD B. FREEMAN, Herbert Ascherman Chair in Economics, Harvard University and Senior Research Fellow in Labour Markets, London School of Economics

"A lot has been written about the so-called Polder model, the Dutch model of consensus building, to which many of its economic successes of the 1990s have been attributed. However, little attention has been paid to the downside of this success: the strong growth of low-wage employment. This volume fills the gap by giving extensive consideration to the bottom segment of the labor market. It is unique in discussing and analyzing low-wage work at the national level as well as at the industry and the company level. It convincingly demonstrates how strong job growth may have the price of erosion of income security and job quality at the lower end of the labor market. Reading Low-Wage Work in the Netherlands is indispensable for everyone who wants to know how the Dutch Polder model really works."
-PAUL DE BEER, Henri Polak Professor of Industrial Relations, University of Amsterdam

"Any student of the low-wage labor market must at some point answer several questions. How much can institutional differences affect the strategies that firms adopt? How, in turn, can these strategies affect outcomes for low-wage workers? Is it possible to create a high road environment for low-skill employment? This fascinating study provides an in-depth analysis that helps answer such questions in industries familiar to all labor market researchers-retail, hotels, health care, call centers, and food-in the context of the 'Dutch model.' The authors weave rich case study information together with statistical data to provide a vivid tapestry of work conditions under the 'Dutch model.' Both their findings and their careful analytic approach make Low-Wage Work in the Netherlands a must read for serious labor market researchers."
-JULIA I. LANE, senior vice president, National Opinion Research Center, University of Chicago

The Dutch economy has often been heralded for accomplishing solid employment growth within a generous welfare system. In recent years, the Netherlands has seen a rise in low-wage work and has maintained one of the lowest unemployment rates in the European Union. Low-Wage Work in the Netherlands narrows in on the causes and consequences of this new development. The authors find that the increase in low-wage work can be partly attributed to a steep rise in the number of part-time jobs and non-standard work contracts—46 percent of Dutch workers hold part-time jobs. The decline in full-time work has challenged historically powerful Dutch unions and has led to a slow but steady dismantling of many social insurance programs from 1979 onward. At the same time, there are hopeful lessons to be gleaned from the Dutch model: low-wage workers benefit from a well-developed system of income transfers, and many move on to higher paying jobs. Low-Wage Work in the Netherlands paints a nuanced picture of the Dutch economy by analyzing institutions that both support and challenge its low-wage workforce.

WIEMER SALVERDA is director of the Amsterdam Institute for Advanced Labour Studies.

MAARTEN VAN KLAVEREN is researcher and consultant at STZ Consultancy and Research.

MARC VAN DER MEER is director of studies at the Amsterdam Institute for Advanced Labour Studies.

CONTRIBUTORS: Ria Hermanussen, Robert Solow, Wim Sprenger, Kea Tijdens, Arjen Van Halem. 

A Volume in the RSF Case Studies of Job Quality in Advanced Economies

"This book represents a step in the right direction by making important distinctions among types of social capital. Moreover, it addresses how social capital can be generated and used to combat poverty and promote social justice. By providing direction for policy and community practice, research, and teaching, this volume will be a useful addition to many courses and bookshelves."
-Journal of Community Practice

"A landmark accomplishment on three fronts: the evolution of social capital scholarship, our understanding of the causes and consequences of 'true disadvantage,' and our knowledge of effective approaches to working with poor communities. Deftly integrating the practical applications of theory and the theoretical implications of hard-won lessons from the field, this volume showcases the work of America's finest thinkers and doers in the rapidly expanding social capital universe. In conjunction with related work on poverty in low income countries, these U.S. cases powerfully demonstrate that a focus on building up the social, economic, and political assets-rather than harping on the 'deficits'-of poor communities can rest on rigorous conceptual and empirical foundations, and provide a coherent framework for informed policy and project recommendations. Too many books are labeled 'required reading,' but whether you're a new or seasoned reader of the social capital literature, this volume belongs at the top of the list."
-Michael Woolcock, World Bank and Harvard University

"Social Capital and Poor Communities shows why community building is critical to improving the lives of families in low-income communities, and offers fresh ideas for mobilizing social resources to improve housing, education, health, public safety, and economic development. This important book tackles tough questions about how community organizations can act effectively together, the importance of leadership development and institution-building, and the challenges of working in policy and political arenas. Bringing the latest in social science research together with the results of practical efforts to combat poverty, this volume is must reading for policymakers, practitioners, and all those concerned about justice and equity in America."
-Angela Glover Blackwell, PolicyLink

Neighborhood support groups have always played a key role in helping the poor survive, but combating poverty requires more than simply meeting the needs of day-to-day subsistence. Social Capital and Poor Communities shows the significant achievements that can be made through collective strategies, which empower the poor to become active partners in revitalizing their neighborhoods. Trust and cooperation among residents and local organizations such as churches, small businesses, and unions form the basis of social capital, which provides access to resources that would otherwise be out of reach to poor families.

Social Capital and Poor Communities examines civic initiatives that have built affordable housing, fostered small businesses, promoted neighborhood safety, and increased political participation. At the core of each initiative lie local institutions—church congregations, parent-teacher groups, tenant associations, and community improvement alliances. The contributors explore how such groups build networks of leaders and followers and how the social power they cultivate can be successfully transferred from smaller goals to broader political advocacy. For example, community-based groups often become platforms for leaders hoping to run for local office. Church-based groups and interfaith organizations can lobby for affordable housing, job training programs, and school improvement.

Social Capital and Poor Communities convincingly demonstrates why building social capital is so important in enabling the poor to seek greater access to financial resources and public services. As the contributors make clear, this task is neither automatic nor easy. The book's frank discussions of both successes and failures illustrate the pitfalls—conflicts of interest, resistance from power elites, and racial exclusion—that can threaten even the most promising initiatives. The impressive evidence in this volume offers valuable insights into how goal formation, leadership, and cooperation can be effectively cultivated, resulting in a remarkable force for change and a rich public life even for those communities mired in seemingly hopeless poverty.

SUSAN SAEGERT is professor of environmental psychology at the Graduate Center, City University of New York.

J. PHILLIP THOMPSON is Associate Professor in American politics, Columbia University.

MARK R. WARREN is associate professor in the Graduate School of Education at Harvard University.

CONTRIBUTORS:  Mark Chaves,  Cathy J. Cohen,  Cynthia M. Duncan,  Michael Foley,  Ross Gittell,  Sherman A. James,  Langley C. Keyes,  Margaret Levi,  M. Lisette Lopez,  John D. McCarthy, Lorraine C. Minnite,  Pedro A. Noguera,  Melvin L. Oliver,  Robert Putnam,  Robert J. Sampson,  Amy Schulz,  Robert Y. Shapiro,  Carol B. Stack,  Juliana van Olphen.

A Volume in the Ford Foundation Series on Asset Building

"Financing Low-Income Communities fills a significant gap in the literature on community development. While much has been written about organizational and political issues, relatively few works explain how to finance activities at the neighborhood level. By definition, low-income communities lack assets. This book is a guide for practitioners and a contribution to scholarship concerning best practices in raising the funds necessary to bring projects to fruition."
-Susan S. Fainstein, Harvard University Graduate School of Design

"Financing Low-Income Communities is a most timely examination of the most critical financial services issues of our day by leading scholars and activists. In exploring the behavior of individuals and their families, the practices of financial institutions, and the policies of regulatory and legislative bodies it maps out directions for steering investment to traditionally underserved communities."
-Gregory D. Squires, George Washington University

"Financing Low-Income Communities is necessary reading for public and private sector leaders addressing the challenges of bringing financial services and capital to poor communities. Leading experts provide critical insights into ways institutions can best serve low income communities, key metrics for evaluating community development programs and policy reforms to overcome the financial exclusion of marginalized neighborhoods."
-Susan M. Wachter, University of Pennsylvania

Access to capital and financial services is crucial for healthy communities.  However, many impoverished individuals and neighborhoods are routinely ignored by mainstream financial institutions.  This neglect led to the creation of community development financial institutions (CDFIs), which provide low-income communities with financial services and act as a conduit to conventional financial organizations and capital markets. Edited by Julia Sass Rubin, Financing Low-Income Communities brings together leading experts in the field to assess what we know about the challenges of bringing financial services and capital to poor communities, map out future lines of research, and propose policy reforms to make these efforts more effective.

The contributors to Financing Low-Income Communities distill research on key topics related to community development finance. Daniel Schneider and Peter Tufano examine the obstacles that make saving and asset accumulation difficult for low-income households—such as the fact that tens of millions of low-income and minority adults don’t have a bank account—and consider solutions, like making it easier for low-wage workers to enroll in 401(K) plans. Jeanne Hogarth, Jane Kolodinksy, and Marianne Hilgert review evidence showing that community-based financial education programs can be effective in changing families’ saving and budgeting patterns.  Lisa Servon proposes strategies for addressing the challenges facing the microenterprise field in the United States.  Julia Sass Rubin discusses ways community loan and venture capital funds have adapted in response to the decreased availability of funding, and considers potential sources of new capital, such as state governments and public pension funds.  Marva Williams explores the evolution and recent performance of community development banks and credit unions.  Kathleen Engel and Patricia McCoy document the proliferation of predatory lenders, who market loans at onerous interest rates to financially vulnerable families and the devastating effects of such lending on communities—from increased crime to falling home values and lower tax revenues. Rachel Bratt reviews the policies and programs used to make rental and owned housing financially accessible.  Rob Hollister proposes a framework for evaluating the contributions of community development financial institutions.

Despite the many accomplishments of CDFIs over the last four decades, changing political and economic conditions make it imperative that they adapt in order to survive.  Financing Low-Income Communities charts out new directions for public and private organizations which aim to end the financial exclusion of marginalized neighborhoods.

JULIA SASS RUBIN is assistant professor at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

CONTRIBUTORS: Julia Sass Rubin, Rachel G. Bratt, Kathleen C. Engel, Marianne A. Hilgert, Jeanne M. Hogarth, Robinson Hollister, Jane Kolodinsky, Patricia A. McCoy, Daniel Schneider, Lisa Servon, Peter Tufano, and Marva E. Williams.

Shows what happens when a specific social policy is tried out on an experimental basis prior to being enacted into law. By providing a trial of a variety of negative income tax plans carried out over a three-year period in four communities, the New Jersey-Pennsylvania Income Maintenance Experiment was designed to observe whether income maintenance would lead to reduced work effort on the part of those who received subsidies. This book evaluates the final project reports on the experiment issued by Mathematica, Inc. and the Institute for Research on Poverty at the University of Wisconsin.

PETER H. ROSSI is professor of sociology and director of the Social and Demographic Research Institute at the University of Massachusetts, Amherst.

KATHARINE C. LYALL is assistant professor of political economy and senior research associate at the Center for Metropolitan Planning and Research, Johns Hopkins University.

A publication in the Continuities in Evaluation Research series.

"One of the year's best books on Puerto Rico." —El Nuevo Dia, San Juan

"[The authors] are highly regarded labor economists who have written extensively and intelligently in the past, and again in this volume, on Puerto Rican migration and labor markets... There isabundant statistical data and careful analysis, some of which challenges the conventional wisdom. Highly recommended." —Choice

Island Paradox is the first comprehensive, census-based portrait of social and economic life in Puerto Rico. During its nearly fiftyyears as a U.S. commonwealth, the relationship between Puerto Rico's small, developing economy and the vastly larger, more industrialized United States has triggered profound changes in the island's industry and labor force. Puerto Rico has been deeply affected by the constant flow of its people to and from the mainland, and by the influx of immigrant workers from other nations. Distinguished economists Francisco Rivera-Batiz and Carlos Santiago provide the latest data on the socioeconomic status of Puerto Rico today, and examine current conditions within the context of the major trends of the past two decades.

Island Paradox describes many improvements in Puerto Rico's standard of living, including rising per-capita income, longer life expectancies, greater educational attainment, and increased job prospects for women. But it also discusses the devastating surge in unemployment. Rapid urbanization and a vanishing agricultural sector have led to severe inequality, as family income has become increasingly dependent on education and geographic location. Although Puerto Rico's close ties to the United States were the major source of the island's economic growth prior to 1970, they have also been at the root of recent hardships. Puerto Rico's trade andbusiness transactions remain predominantly with the United States, but changes in federal tax, social, and budgetary policies, along with international agreements such as NAFTA, now threaten to alter the economic ties between the island and the mainland.

Island Paradox reveals the social and family changes that have occurred among Puerto Ricans on the island and the mainland. The significant decline in the island's population growth is traced in part to women's increased pursuit of educational and employment opportunities before marrying. More children are being raised by singleparents, but this stems from a higher divorce rate and not a rise in teenage pregnancy. The widespread circular migration to and from the United States has had strong repercussions for the island's labor markets and social balance, leading to concerns about an island brain drain. The Puerto Rican population in the United States hasbecome increasingly diverse, less regionally concentrated and not, as some have claimed, in danger of becoming an underclass.

Within a single generation Puerto Rico has experienced social and economic shifts of an unprecedented magnitude. Island Paradox charts Puerto Rico's economic fortunes, summarizes the major demographic trends, and identifies the issues that will have the strongest bearings on Puerto Rico's prospects for a successful future.

FRANCISCO L. RIVERA-BATIZ is director of the Program in Economic Policy Management and associate professor in the Economics Department and the Latino Studies Program at Columbia University. He is also associate professor of international studies at Teachers College, Columbia University.

CARLOS E. SANTIAGO is professor in the Department of Latin American and Caribbean Studies and in the Department of Economics and associate vice president for academic affairs at the State University of New York, Albany.
 

A Volume in the RSF Census Series

"Though economists claim that dollar bills will not be left 'lying in the street,' the profits from sharply focused exchange between sociologists and economists are rarely taken. This sparkling volume is a welcome exception. Prominent practitioners of both arts present important work on networks and markets, and critique one another in concise and fruitful ways. An invaluable resource for those who follow these exciting new developments in social theory."
- MARK GRANOVETTER, Stanford University

"A pioneering collaboration between economists and sociologists. The contributors compete and cooperate with each other, combining the best traditions of the two fields, to elucidate the organization of industrial economies in East Asia, fish markets in Marseille, banking in renaissance Florence, ethnic business networks in New York, and much else."
- DANI RODRIK, Harvard University

"After a century of separation, economics and other social sciences are reestablishing mutually beneficial links. These studies of the interaction between social networks and markets are an excellent case in point. Here, a dozen sociologists and economists bring together their skills in case studies and theoretical modeling to create a rich and fascinating collection that will inspire much further research."
-AVINASH K. DIXIT, Princeton University

Networks and Markets argues that economists' knowledge of markets and sociologists' rich understanding of networks can and should be combined. Together they can help us achieve a more coherent view of economic life, where transactions follow both the logic of economic incentives and the established channels of personal relationships.

Market exchange is impersonal, episodic, and carried out at arm's length. All that matters is how much the seller is asking, and how much the buyer is offering. An economic network, by contrast, is based upon more personalized and enduring relationships between people tied together by more than just price. Networks and Markets focuses on how the two concepts relate to each other: Are social networks an essential precondition for successful markets, or do networks arise naturally out of markets, as faceless traders build reputations and gain confidence in each other?

The book includes contributions by both sociologists and economists, applying the concepts of markets and networks to concrete empirical phenomena. Among the topics analyzed, the book explains how, in Taiwan, South Korea, and Japan, firms combine into tightly-knit business blocs, how wholesalers in a Marseille fish market earn the loyalty of customers, and how ethnic retailers in the U.S. share valuable market information with other shopkeepers from their ethnic group. A response to each chapter discusses the issue from the standpoint of the other discipline. Sociologists are challenged to go beyond small-scale economic exchange and to integrate their concept of networks into a broader understanding of the economic system as a whole, while economists are challenged to consider the economic implications of network ties, which can be strong or weak, unconditional or highly contingent.

This book proves that both economics and sociology provide stronger insights when they study markets and networks as parallel forms of exchange. But it also clarifies the healthy division of labor that remains between the two disciplines. Sociologists are adept at showing how markets are framed by social institutions; economists specialize in explaining how markets perform, taking the social context as a given. Networks and Markets showcases what each discipline does best and reveals where each discipline would do better by borrowing from the other.

JAMES E. RAUCH is professor of economics at the University of California, San Diego.

ALESSANDRA CASELLA is professor of economics at Columbia University.

CONTRIBUTORS: Ronald. S Burt, Gregory Basharov, Robert C. Feenstra, Neil Fligstein, Avner Greif, Gary C. Hamilton, Deng-Shing Huang, Alan Kirman, John F. Padgett, Rebeca Raijman, Joel Sobel, Marta Tienda.

"In an instance of supreme irony, economists and sociologists studying networks have traditionally conducted their researches in largely unconnected components, each with its own questions, methods, and citation clusters. The Missing Links indeed provides the missing links between the two literatures. In the jargon of the subject, it bridges a structural hole. Much intellectual traffic will flow across this bridge in the future."
-AVINASH DIXIT, John J. F. Sherrerd '52 University Professor of Economics, Princeton University

"The contemporary study of social networks represents one of the most exciting endeavors in social science and constitutes a remarkable integration of ideas from economics and sociology. The Missing Links brings together many of the most important thinkers on social networks to produce a valuable overview of the state of the field. This book will be of great value to students as well as researchers. Editor James Rauch, who has made a number of seminal contributions to social network research, deserves congratulations for assembling such a fine collection of essays."
-STEVEN N. DURLAUF, Kenneth J. Arrow Professor of Economics, University of Wisconsin, Madison

Half of all workers are hired through personal referrals, and networks of social connections channel the flows of capital, technology, and international trade. Sociologists and economists alike recognize that economic exchange is shaped by social networks, which propagate information and facilitate trust, but each discipline brings a distinct theoretical perspective to the study of networks. Sociologists have focused on how networks shape individual behavior, economists on how individual choices shape networks. The Missing Links is a bold effort by an interdisciplinary group of scholars to synthesize sociological and economic theories of how economic networks emerge and evolve.

Interweaving sophisticated theoretical models and concrete case studies, The Missing Links is both an introduction to the study of economic networks and a catalyst for further research. Economists Rachel Kranton and Deborah Minehart illustrate their field’s approach to modeling network formation, showing how manufacturers form networks of suppliers in ways that maximize profits. Exemplifying the sociological approach, Ronald Burt analyzes patterns of cooperation and peer evaluations among colleagues at a financial organization. He finds that dense connections of shared acquaintances lead to more stable reputations.  In the latter half of the book, contributors combine the insights of sociology and economics to explore a series of case studies. Ray Reagans, Ezra Zuckerman, and Bill McEvily investigate an R & D firm in which employees participate in overlapping collaborative teams, allowing the authors to disentangle the effects of network structure and individual human capital on team performance. Kaivan Munshi and Mark Rosenzweig examine how economic development and rising inequality in India are reshaping caste-based networks of mutual insurance and job referrals. Their study shows that people’s economic decisions today are shaped both by the legacy of the caste hierarchies and by the particular incentives and constraints that each individual faces in an evolving labor market.

Economic globalization is forging new connections between people in distant corners of the world, while unsettling long-standing social relations. Anyone interested in understanding the opportunities and challenges of this era of rapid change will find a highly informative guide in The Missing Links.

JAMES E. RAUCH is professor of economics at the University of California, San Diego, and a research associate at the National Bureau of Economic Research.

CONTRIBUTORS: Ronald S. Burt, Gregory Besharov, Robert C. Feenstra, Neil Fligstein, Avner Greif, Gary G. Hamilton, Deng-Shing Huang, Alan Kirman, John F. Padgett, Rebeca Raijman, Joel Sobel, Marta Tienda.