Social networks and labour market participation in Melbourne
William Mitchell, Anthea Bill, Pip Pattison, Galina Daraganova and Scott Baum.
University of Newcastle, University of Melbourne and Griffith University
Contact Email:   anthea.billnewcastle.edu.au

It has been argued that social networks are responsible for differentiated access to job-related information possessed by workers; workers with diverse or ‘high quality’ network structures having significant labour market advantages. This paper specifically examines the proposition that the composition and reach of individuals’ social networks contribute to the low levels of labour force participation and earnings within a characteristically disadvantaged region of Melbourne.

The paper draws on labour market and demographic information collected from 500 residents in the high unemployment area of Brimbank-Sunshine, Melbourne. This survey employs a snow-ball design (surveying both initial respondents and network members) and details participants’ network characteristics and structure, in addition to information concerning the geographical barriers to employment. Using spatial analytic techniques (Moran’s I and Geary’s C) we examine the extent to which networks appear to be spatially localised. We also employ logit techniques (accounting for the dependency induced by the snowball structure) to assess the role networks play in labour force participation and earnings, independent of other characteristics. If network structures are geographically constrained and independently influence participation and earnings, employment outcomes between individuals become positively correlated over time and space. Thus individual social networks may represent a possible source of spatial dependency and partly explain persistent neighbourhood inequality observed within Australian cities.

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