Introduction

In the two previous chapters, distance to jobs was put forward as the main reason for explaining the high unemployment rates and the low wages of black workers and other ethnic minorities (the so-called spatial-mismatch hypothesis). This is obviously not the only determinant since both in cities where black workers reside close to jobs (such as New York, Chicago, or Philadelphia) and in cities where they live far away from jobs (such as Los Angeles, Atlanta, or Houston), black workers do experience adverse labor market outcomes. In the present chapter, we would like to focus on another important aspect, namely the role of social networks in finding a job.

A social network is a social structure made of nodes (which are individuals or firms) that are tied by one or more specific types of interdependency, such as values, friends, kinship, etc. As a result, any social network analysis studies social relationships in termsof nodes and ties. Nodes are the individual actors within the networks, and ties are the relationships between the actors. These concepts are often displayed in a social network diagram, where nodes are the points and ties are the lines. In the present chapter, we mainly focus on ties between friends who can exchange information about jobs. The study of social networks in labor markets highlights the nature of labor market transactions as very different from trading in goods, and postulates that access to information is heavily influenced by social structure. Individuals use connections with others, such as friends and social and professional acquaintances, to maintain information networks.