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Network Structure and Performance

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Listed:
  • Ilse Lindenlaub
  • Anja Prummer

Abstract

We develop a theory that links individuals’ network structure to their productivity and earnings. While a higher degree leads to better access to information, more clustering leads to higher peer pressure. Both information and peer pressure affect effort in a model of team production, with each being beneficial in a different environment. We find that information is particularly valuable under high uncertainty, whereas peer pressure is more valuable in the opposite case. We apply our theory to gender disparities in performance. We document the novel fact that men establish more connections (a higher degree) whereas women possess denser networks (a higher clustering coefficient). We therefore expect men to outperform women in jobs that are characterised by high uncertainty in project outcomes and earnings. We provide suggestive evidence that supports our predictions.

Suggested Citation

  • Ilse Lindenlaub & Anja Prummer, 2021. "Network Structure and Performance," The Economic Journal, Royal Economic Society, vol. 131(634), pages 851-898.
    • Handle: RePEc:oup:econjl:v:131:y:2021:i:634:p:851-898.
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    File URL: http://hdl.handle.net/10.1093/ej/ueaa072
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    Citations

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    Cited by:

    1. Lorenzo Ductor & Anja Prummer, 2022. "Gender Homophily, Collaboration, and Output," ThE Papers 22/18, Department of Economic Theory and Economic History of the University of Granada..
    2. Marta Silva & José Garcia-Louzão, 2021. "Coworker Networks and the Labor Market Outcomes of Displaced Workers: Evidence from Portugal," Working Papers w202121, Banco de Portugal, Economics and Research Department.
    3. Buhai, I. Sebastian & van der Leij, Marco J., 2023. "A Social Network Analysis of Occupational Segregation," Journal of Economic Dynamics and Control, Elsevier, vol. 147(C).
    4. Yoshitaka Ogisu, 2022. "Referral Hiring and Social Network Structure," Papers 2201.06020, arXiv.org, revised Aug 2022.
    5. Afridi, Farzana & Dhillon, Amrita & Roy, Sanchari & Sangwan, Nikita, 2023. "Social Networks, Gender Norms and Labor Supply: Experimental Evidence Using a Job Search Platform," CAGE Online Working Paper Series 677, Competitive Advantage in the Global Economy (CAGE).
    6. Matthias Fahn & Takeshi Murooka, 2022. "Informal Incentives and Labor Markets," Economics working papers 2022-05, Department of Economics, Johannes Kepler University Linz, Austria.
    7. Azmat, Ghazala & Boring, Anne, 2020. "Gender Diversity in Firms," IZA Policy Papers 168, Institute of Labor Economics (IZA).
    8. Tahmooresnejad, Leila & Turkina, Ekaterina, 2022. "Female inventors over time: Factors affecting female Inventors’ innovation performance," Journal of Informetrics, Elsevier, vol. 16(1).
    9. Dennis Wesselbaum, 2023. "Understanding the Drivers of the Gender Productivity Gap in the Economics Profession," The American Economist, Sage Publications, vol. 68(1), pages 61-73, March.
    10. Alexandra Fedorets & Anna Gibert, 2022. "Lifting Women Up: Gender Quotas and the Advancement of Women on Corporate Boards," Working Papers 1370, Barcelona School of Economics.
    11. Lorenzo Ductor & Sanjeev Goyal & Anja Prummer, 2023. "Gender and Collaboration," ThE Papers 23/01, Department of Economic Theory and Economic History of the University of Granada..
    12. Siobhán M. Mattison & Neil G. MacLaren & Ruizhe Liu & Adam Z. Reynolds & Gabrielle D. Baca & Peter M. Mattison & Meng Zhang & Chun-Yi Sum & Mary K. Shenk & Tami Blumenfield & Christopher von Rueden & , 2021. "Gender Differences in Social Networks Based on Prevailing Kinship Norms in the Mosuo of China," Social Sciences, MDPI, vol. 10(7), pages 1-19, July.
    13. Sule Alan & Elif Bodur & Elif Kubilay & Ipek Mumcu, 2021. "Social Status in Student Networks and Implications for Perceived Social Climate in Schools," CESifo Working Paper Series 9095, CESifo.

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