How Do Labor Market Networks Work?
Title
How Do Labor Market Networks Work?
Author
Rubineau, Brian
Fernandez, Roberto M.
Research Area
Social Institutions
Topic
Markets
Abstract
The informal seeking and sharing of job opportunity information via contacts are the dominant mechanisms for both the supply and demand sides of the labor market. Despite many decades of scholarly scrutiny, we have established little certainty about the mechanisms through which labor market networks operate. Much of this uncertainty results from single‐perspective investigations of a fundamentally triadic process. Network‐mediated job search is not merely a version of the classic two‐way matching problem with some additional network factors but is rather a three‐way matching problem with three distinct agentic decision makers: the job seeker, the job screener, and the social contact acting as a connector. This essay summarizes what is currently known about the operation and consequences of labor market networks, their mechanisms, and their contextual dependencies. We show how the perspective of a triad of actors presents new opportunities for resolving current contradictory empirical findings and areas of ongoing debate. Progress on this topic requires both careful causal research isolating mechanisms affecting a particular actor and integrative research on how these mechanisms interact among the triad of actors.