Social Capital and Institutional Transition: Regional Context for Network Use in Job Search in Russia, 1985-2001

Abstract

Current research on network use in the labor market focuses primarily on network morphology. In this dissertation, I use hierarchical regression to examine the influence of macro-level context on network use in job search.This study relies on a unique data set that combines individual job history data for years 1985 through 2001 collected by the Survey of Social Dynamics and Migration in Russia (SSMDR) in 40 regions in 2001-2002 and corresponding regional macro-economic data published by Goskomstat, the State Statistical Committee of the Russian Federation.The first question of this study focuses on what accounts for the temporal and regional variation in personal network use in the Russian labor market. I find that, for the post-Soviet period, increase in network use in job search can be attributed to the growth of the private sector: Russian employers are becoming "social capitalists" who take advantage of the resources personal connections can offer. I also find that the chances of finding a new job through personal ties are higher in the regions with larger small business sectors and in the regions with lower economic performance.Next I examine how regional economic performance and unemployment affect workers' chances of getting new jobs in the private sector and in smaller size organizations by means of personal networks. The analysis shows that social networks do lead to employment in the private sector and that this relationship is positively affected by regional economic performance, but not by unemployment rate. I also find here that social ties are likely to lead to new jobs in small organizations, but that this relationship does not vary by region.Finally, I investigate how regional economic performance and unemployment rates affect wages for jobs found through personal networks in the private sector and in small organizations. I find that while the private sector rewards network use, small organizations do not. The relationship between network use and wages does not vary by region. That is, regional economic performance does not have an effect on this relationship.