Social networks and labour market outcomes in a meritocracy

This paper examines the significance of personal contacts in job searches, in the context of Singapore's meritocratic system. I show that in certain sectors, such as the state bureaucracy, social networking brings no distinct advantages as appointments are made exclusively on the basis of the academic credentials of the candidates. Thus, personal contacts are not always useful, especially in labour markets that rely heavily on the signalling role of academic credentials to match persons to jobs and allocate rewards. In contrast, personal contacts are more useful among less qualified job searchers in the private sector. (C) 2010 Elsevier B.V. All rights reserved.