Of Markets and Networks: Marketization and Job Lead Receipt in Transitional China

Market transition theory implies that increased market competition generates incentives for allocating job resources based on educational credentials and marketable skills, in contrast with traditional patronage systems that allocate employment opportunities through network membership. Yet despite the breakdown of patronage systems, further development of market institutions result in greater uncertainty, job precarity, and competition, which may promote referral hiring and diffusion of job information through social networks. This paper explores the relationship between marketization and access to employment opportunities through social networks (specifically the receipt of unsolicited job leads). Data from the Social Capital China Survey suggest that growing marketization across provinces is positively associated with receipt of unsolicited job leads. In particular, private sector development, factor market development, and legal intermediary proliferation are significantly and positively associated with an individual's chance of receiving unsolicited job leads. The findings help clarify the mechanisms through which marketization facilitates informal exchange of job information, advancing scholarship on how concrete institutional conditions shape the significance of social networks.