| This dissertation contributes to the understanding of endogenous job network formation and utilization under varying job-market conditions. It is composed of three chapters, each of which examines different aspects of networking in the pursuit of employment.;A large body of research documents the importance of social ties in finding jobs around the world, in periods of economic expansion and contraction, among developed and less-developed countries, and within urban and rural areas. This dissertation studies the impact of job-market conditions on the effectiveness of social ties in obtaining jobs and on peoples' choices of networking behavior. It examines the use of networks and the network formation process, including the incentives, perceived and/or real, for individuals to form connections in order to share jobs, while others simultaneously choose for themselves. This work compares individual choices relative to predicted behavior in networking and network use and tries to interpret and explain any differences.;The first chapter, entitled, "Network-Formation Theory, Experiments, and an Application," discusses literature related to networks and endogenous network formation, reporting on a group of theoretical and empirical works about job markets, matching, and networking. The majority of works considered are from within the economics of networks framework. The chapter targets a particular application: job-contact networks or referral-based hiring. It highlights the widespread use of social contacts for finding jobs in many settings, considers the importance of social tie strength, and discusses related effects on wages, productivity and job turnover. Finally, the chapter reviews a variety of job-contact models in detail, including their main assumptions, advantages and drawbacks, which provides overall perspective for the main job-contact model to be presented and tested in the next chapter.;The second chapter, entitled, "A Laboratory Test of Endogenous Job-Contact Networks," describes a laboratory implementation and evaluation of endogenous job-contact networks under varying job-market conditions. Specifically, it tests for a non-monotonic relation between the job separation rate (as well as the job offer rate) and peoples' choices of network investment, which consequently affect the likelihood of finding jobs through social networks. The data are drawn from a laboratory enactment of a published theoretical framework under controlled conditions. The chapter details the experimental procedures undertaken, presents the collected data and an empirical model, and discusses the statistical results and overall findings. The outcomes are examined under multiple information levels and linking-cost levels, and post-experiment questionnaire responses are also considered.;The third chapter, entitled, "Extensions of Job-Contact Network Formation in the Laboratory," describes and tests augmentations of the base case job-contact networks setup which step beyond the formally derived theory in order to rule out some alternative explanations of the laboratory-observed phenomena and to assess the overall robustness of the base case results. In particular, three variations are considered: (1) Higher payoffs for jobs found via network matching than for jobs found through other sources; (2) Human players grouped with computer players that follow predetermined strategies (i.e., instead of with other people); (3) Heterogeneous job loss and offer rates among players.. The chapter closes with a discussion motivating additional extensions related to job-contact networks that could merit further model development and/or experimentation in the future.;Taken together, the main contributions of this dissertation are: (1) To synthesize a wide range of readings that are foundational or related to job-contact networks and related theory; (2) To document peoples' networking behavior in laboratory job-contact networks under varying job-market conditions that influence network productivity; and (3) To illustrate useful extensions to the basic laboratory testing of the theory and to help stimulate continued related research in this important area. The results of this project could, at the margin, improve the economics of networks field's collective understanding about the formation and use of job-contact networks. This work could also aid in the discovery and application of some individual and/or policy remedies that improve worker-job matching and job-market outcomes, though also being mindful of possible unintended consequences. |
