Sometimes, when it comes to finding a job, it's not about what you know, but who you know. Personal networks can be a valuable source of information about employment, and can even help people land interviews or positions. Many scholars have argued that minorities are less likely to be connected to job-finding networks, which in part accounts for their underachievement in the labor market. Roberto Fernandez of the Massachusetts Institute of Technology is not convinced, however. He finds fault with the majority of studies on networks and labor markets, saying that the researchers have made inferences about the role of networks without observing data on actual hiring.
To avoid this problem, Fernandez is conducting a study using data on applicants to a factory, which will allow him to test some of the links between social networks and race in hiring. The factory keeps track of whether the applicants are referred and whether they are transitioning from welfare to work. With these data as well as data on racial background and gender, Fernandez will be able to answer a number of questions at the center of the debate on networks, race, and poverty. If part of the disadvantage that the non-working poor face in the labor market is that they lack access to job networks, then few welfare-to-work applicants should appear in the referrals. By tracking applicants' welfare and referral status, Fernandez should be able to ascertain whether isolation from job networks does indeed form a real barrier to employment. He will also be able to gauge the degree of racial segregation in referral networks by comparing the race of the referrer with the race of the referred applicant. Funding from Russell Sage will assist Fernandez in analyzing the data and writing up his results in scholarly publications.