Heterogeneous Returns to Social Networks: Effects on Earnings and Job Satisfaction in the Chinese Labor Market

Abstract

With the advancement of social network research over time, a research consensus has been reached that the use of social networks in job searching can provide positive returns. This study focused on the heterogeneity in the returns to social networks. Using Job Search and Social Networks (JSNET) survey data on urban residents of China, we examined the differences in the propensity to use social networks in job searching and the returns to social networks in terms of job seekers’ earnings and job satisfaction using propensity score stratification and the heterogeneous treatment effects model (HTE model). The use of social networks in job searching was found to be nonrandomly distributed, and the propensity to use such networks varied according to job seeker characteristics. For job seekers with different propensities, the returns to social networks were also different. Moreover, there was negative selection in the instrumental effect of social network use in the job search process but positive selection in the expressive effect: the higher the propensity to use one’s networks, the lower the income return to social networks and the higher the job satisfaction; the lower the propensity to use one’s networks, the higher the income return and the lower the job satisfaction.