The causal effect of social capital on income: A new analytic strategy

Jing Shen, Yanjie Bian

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

This study identifies three groups of job seekers in terms of the channels used to search for jobs: the formal channel involving only official procedures to obtain a job, the informal channel using only social contacts to obtain a job, and the joint channel leveraging both social contacts and official procedures. The analysis of a national sample survey of China shows that joint channel users, due to their relatively higher level of social capital, not only make more job search attempts but also obtain higher income than formal channel users. Meanwhile, joint channel users, because of their relative advantages in both human capital and social capital, not only make more job attempts but also obtain higher income than informal channel users. The two comparisons offer a new strategy to test the causal role social capital plays in labour market success, regardless of whether social capital is exogenous or endogenous to human capital.

Original languageEnglish (US)
Pages (from-to)82-90
Number of pages9
JournalSocial Networks
Volume54
DOIs
StatePublished - Jul 2018

Bibliographical note

Publisher Copyright:
© 2018 Elsevier B.V.

Keywords

  • Causal effect
  • Endogeneity
  • Human capital
  • Joint channel
  • Reservation wage
  • Social capital

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