FT Magazine
Undercover Economist
By Tim Harford
‘Your family won’t
get you a job or pay your bills ... By contrast, distant contacts are sometimes
surprisingly useful’
©Raymond Biesinger
This may be a
statement of the obvious at Christmas, but our families can sometimes let us
down. Evidence comes from a little-noticed survey published by the US Census
Bureau in September. The findings are conveyed in a sad and simple graph. It
reports a survey of “households experiencing hardship” in 2011 – and who helped
them when times were tough. What counted as tough times? Having a phone
disconnected, missing utility bill payments, falling into rent or mortgage
arrears, or not seeing a doctor or dentist when needed.
More than half of
such households expected help from family members, as did almost half from
friends. Rather fewer – about a fifth – hoped for help from a social agency,
charity or church.
The overwhelming
majority were disappointed. It was rare for family members to provide help with
rent arrears – about one time in six – and it was rarer still to receive
financial help from other sources or for other purposes.
In short, hard-up
Americans were confident of help in need from those close to them – and that
confidence was misplaced. (If you’re looking for an explanation of the popularity of
payday loans, this finding isn’t a bad start.)
An optimistic reading
of this research is that there are plenty of people whose families or friends
did help them and thus never featured in the sample. Perhaps. But as the
economist Timothy Taylor comments, enough people experience disappointment to
leave “lasting shadows”.
This dispiriting
stuff reminded me of Mark Granovetter’s work on “the strength of weak ties”,
published in 1973. Granovetter, a sociologist, brought together two disparate
strands of work: a survey of how people with professional or managerial jobs
had found those jobs; and a theoretical analysis of the structure of social
networks.
Start with the
theoretical observation first: the most irreplaceable social connections,
paradoxically, are often rather weak or distant ones. A family group or clique
of close friends all tend to know each other and know similar things at similar
times. Their social ties are strong but also redundant, in the sense that there
are many different paths through which information could pass from one member
of that group to another.
By contrast, “weak
ties” between one social cluster and another are valuable precisely because the
social contact is unusual. Information passed along a weak tie will often be
totally new – and if it doesn’t arrive through the weak tie, it is unlikely to
arrive at all.
Granovetter then
supplemented this theoretical idea with his survey, showing that it was very
common for people to find jobs – especially managerial jobs and jobs with which
they were satisfied – through personal contacts. The old saw is true: it’s not
what you know, it’s who you know. Or as Granovetter put it in his book Finding
a Job, what matters most is “one’s position in a social network”.
But this is not
because of crude nepotism: the key contacts who helped jobseekers find jobs
were typically distant rather than close friends – old college contacts,
perhaps, or former colleagues. Granovetter’s analysis made this finding make
sense: it’s the more peripheral contacts who tell you things you don’t already
know.
More recent research
– for instance, a “big data” analysis of millions of mobile phone records
conducted by Jukka-Pekka Onnela, Albert-László Barabási and others – has backed
up Granovetter’s argument that the weaker ties are the vital ones.
It’s a disappointing
message to deliver at Christmas: your family won’t get you a job or pay your
bills – count yourself lucky if they serve you a slice of turkey. By contrast,
distant contacts are sometimes surprisingly useful: no wonder we send Christmas
cards to people we barely remember.
‘The Undercover Economist Strikes Back’, by Tim Harford, is
published by Little, Brown
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