Creating Connections for the Disadvantaged: Networks and Labor Market Intermediaries at the Hiring Interface

60 Pages Posted: 24 Mar 2010 Last revised: 27 May 2012

See all articles by Roberto M. Fernandez

Roberto M. Fernandez

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: March 22, 2010

Abstract

Scholars interested in race inequality have been particularly attracted to network accounts of the stratifying effects of social networks in the labor market. A recurring theme in policy‐oriented research on poverty is that institutional connections can be engineered to create connections between job seekers and employers in ways that parallel social network processes. Yet, there has been little empirical research on how such linkages work across the various steps of the recruitment, screening, and hiring process. We examine how labor market intermediaries can serve as functional substitutes for social network processes for disadvantaged workers. Consistent with policy arguments about the desirability of creating connections to employers, applicants who are connected to this employer via formal labor market intermediaries exhibit a number of the advantages experienced by those applying to the firm via social network ties. Across the two stages of the hiring process, the net result is that applicants with such “created connections” are more likely to be offered jobs, and ultimately hired than other groups of applicants. We conclude with a discussion of the implications of these findings for research on labor market intermediation and other forms of brokerage and the feasibility of policy efforts to “create connections” in the labor market.

Keywords: Race, poverty, networks, brokerage, intermediaries, labor markets

JEL Classification: M51, M12, D63

Suggested Citation

Fernandez, Roberto M., Creating Connections for the Disadvantaged: Networks and Labor Market Intermediaries at the Hiring Interface (March 22, 2010). MIT Sloan Research Paper No. 4778-10, Available at SSRN: https://ssrn.com/abstract=1576608 or http://dx.doi.org/10.2139/ssrn.1576608

Roberto M. Fernandez (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

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