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Social Networking for Jobs May Add to Income Inequality

By Senior News Editor
Reviewed by John M. Grohol, Psy.D. on July 25, 2012

Social Networks Help Americans Find Good JobsSocial networking for vocational prospecting appears to be more effective in the United States than in Germany.

In a new study, researchers from North Carolina State University discover that while informal networks help both European and American job-seekers, networks in America help job-seekers find higher paying positions.

But one downside is that the practice may lead to economic inequality.

“It is interesting to note that the open market system in the United States, with minimal labor regulations, actually sees people benefiting more from patronage — despite the expectation that open markets would value merit over social connections,” said doctoral student Richard Benton, who co-authored the research.

In the study, researchers examined survey data from the U.S. and Germany to compare the extent to which people find new jobs through “informal recruitment.”

Informal recruitment or networking occurs when a person who is not looking for a new job is approached with a job opportunity through social connections.

The study shows that, on average, informal recruitment is significantly more common in Germany, where approximately 40 percent of jobs are filled through informal recruitment — as opposed to approximately 27 percent of jobs in the United States.

However, the jobs people find through informal recruitment in the U.S. are much more likely to be high-wage managerial positions. Specifically, the odds that a job will be filled via networking increase by two percent for every dollar of hourly wage that the job pays.

For example, the odds that jobs paying $40 per hour ($80,000 per year) will be filled through informal recruitment are about 66 percent better than the odds that a minimum-wage job ($7.25 per hour) will be filled through informal recruitment.

By comparison, the researchers found that wages in Germany did not appear to be linked to how workers found their jobs.

“Ultimately, this suggests that U.S. economic institutions offer greater rewards to sponsorship and nepotism than what we see elsewhere, which could help to explain why inequality is so extreme here,” said Dr. Steve McDonald, an associate professor of sociology at NC State and lead author of the paper.

The study can be found online in the journal Social Forces.

Source: North Carolina State University

Man interviewing for a job photo by shutterstock.

 

APA Reference
Nauert, R. (2012). Social Networking for Jobs May Add to Income Inequality. Psych Central. Retrieved on September 22, 2014, from http://psychcentral.com/news/2012/07/25/social-networking-for-jobs-may-add-to-income-inequality/42207.html