Social capital at work: How family, friends and civic ties relate to labour market outcomes

Social capital at work: How family, friends and civic ties relate to labour market outcomes

Wendy Stone, Matthew Gray and Jody Hughes

Research Paper No. 31 — May 2003

In Australia, as in many other nations, there is an emphasis upon paid work as a primary means for achieving economic independence, alleviating poverty and avoiding welfare dependency. Much of this attention focuses on an individual's skills and attributes, or upon characteristics of the labour market. In this paper, we extend these analyses, by investigating the extent to which an individual's 'stock' of social capital relates to labour force outcomes, over and above more well established determinants. In particular, it examines how family and kinship networks, friends and neighbours relate to individual labour market outcomes, compared with the role of civic ties and institutional networks.

Using data collected from a national random sample of 1500 Australians, we use both a network and typology approach to social capital to investigate the relative impact of trust, bonding, bridging and linking relationships upon labour force status and successful job search method. In doing this, we are able to examine what social capital adds to established understandings of labour market determinants and job search. As well, the paper provides one of the few accounts of how the various dimensions and types of social capital relate to each of these outcomes.

We find social capital does matter, but that its effects are uneven, and in some cases may reflect existing inequalities in the labour market. For example, whereas family and other informal relationships are relied on by those with more limited involvement in or access to paid work, professional contacts act to support and reinforce the labour market status of those with the strongest attachment to paid work. These findings lend some support for Granovetter's (1973, 1974) strength of weak ties theory - but show that the relative advantage of weak ties is not universal.

Authors and Acknowledgements

We would like to thank our colleagues at the Institute, including David de Vaus and Ann Sanson, for their helpful comments and interest in earlier versions of this paper, and for engaging in discussions about ideas that have informed this research.

This paper has benefited considerably from the support and interest of several of our peers. In particular, we are grateful to Boyd Hunter at the Australian National University, and Ed Carson at the University of South Australia, whose considered comments have improved this paper. Any shortcomings of the paper remain the sole responsibility of the authors.

Publication details

Research Paper
No. 31
Published by the Australian Institute of Family Studies, May 2003.
42 pp.
0 642 39501 2
Suggested citation:

Stone, W., Gray, M., & Hughes, J. (2003). Social capital at work: How family, friends and civic ties relate to labour market outcomes (Research Paper No. 31). Melbourne: Australian Institute of Family Studies.

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