Recent labor market research has called into question whether social capital effects are causal, or are spuriously due to the influence of social homophily. This essay adopts the demand-side perspective of organizations to examine the causal status of social capital. In contrast with supply-side approaches, we argue that homophily is a key mechanism by which organizations derive social capital. We develop an approach to bolster inferences about the causal status of social capital, and illustrate these ideas using data from a retail bank.
The authors would like to thank the anonymous reviewers, George Lan, Brian Rubineau, Santiago Campero, and the members of the MIT Sloan Economic Sociology working group for their constructive comments and feedback.
Fernandez, R.M. and Galperin, R.V. (2014), "The Causal Status of Social Capital in Labor Markets", Contemporary Perspectives on Organizational Social Networks (Research in the Sociology of Organizations, Vol. 40), Emerald Group Publishing Limited, Bingley, pp. 445-462. https://doi.org/10.1108/S0733-558X(2014)0000040022
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