The Role of Social Networks in the Economic Opportunities Essay Example

in Nicaragua.

Despite the fact that women in rural Nicaragua receive low salaries, they play a significant role in generating income for their households and often bear the responsibility of raising their families independently. However, families headed by women in this region are among the most impoverished and vulnerable groups. While 27% of rural households are led by women, only 15% of these women have land titles in their own names and qualify for a mere 11% of loans. Efforts have been made to address male social conditions within the family structure; however, addressing both financial aspects and ideologies is challenging due to socially constructed purposes and identities that intersect with the struggle for resources. Researchers have examined various factors such as assets, income, social capital, and individual traits like self-confidence from a theoretical perspective to understand how they impact bargaining power within families.

Research has examined the association between housework and paid work, particularly for women who often experience reduced paid work due to their household responsibilities (Gupta, 2006). Studies conducted in Western countries indicate that men tend to exaggerate their contribution to housework while women tend to underestimate the involvement of men (Kamo, 2000). These findings emphasize the presence of gender inequality in Nicaragua's labor market.

This study defines a social network as the connections and relationships among individuals or organizations. These connections can range from casual interactions to close family bonds. Various academic disciplines have demonstrated that social networks operate at different levels, including individual, organizational, and national levels. They play a crucial role in problem-solving, managing organizations, and aiding individuals in accomplishing their objectives.

Empirical evidence has supported the importance of social networks in the

job matching process. The significance of the social network theory is highlighted by the fact that referrals from current employees fill a significant percentage of jobs. Unlike traditional studies that only focus on personal characteristics affecting economic choices, the social network perspective considers individual characteristics and their connections within the network as important factors. Therefore, the social network framework plays a key role in determining job acquisition, type of job obtained, influence of gender or culture on unemployment patterns, and motivation for education and labor force participation (Jackson, 2003).

Furthermore, it is crucial to disseminate and discuss these findings to fully comprehend and appreciate their significance and impact.

Methodology and Data

This study aims to evaluate how Nicaraguan women's economic choices are influenced by social networks and determine if these influences vary across different economic options.

The purpose of the study is to evaluate how social networks affect women's likelihood of participating in different economic activities, while considering individual attributes such as human capital. The economic activities include occupation, formal employment in industries, employer status, self-employment, and non-agricultural sector employment. The descriptive variables denoted by Xi will encompass both family-related and personal factors, including being a family head, age, level of education, owning a home, and access to essential services. Moreover, demographic factors related to family members will be considered.

In their study, Bertrand et al. (2000) suggest that the social network can be represented by a single variable that combines both the level and quality of the social network. The objective of this article is to assess a woman's social network by analyzing the proportion of women aged 15 to 49 who live in the same municipality as her.

The quality of the social network will be evaluated based on the percentage of employed women between 15 and 49 years old within that municipality. To develop this Social Network factor, data from the Nicaraguan Census conducted in 2005 will be utilized. It is important to emphasize that this factor will be constructed at the municipal level, which is considered as Nicaragua's National Institute of Statistics and Censuses' smallest geographical region.

This study focuses on women aged 15-49 who are actively involved in the labor market. The economic outcomes to be evaluated, including the vector of exogenous factors X, are similar to those in (1). SN represents the level of social networking among women. To estimate this factor, data from the National Institute of Statistics and Censuses is combined with family survey data. Individual control will be derived from family information, while social network factor will come from census data. These approximations will offer evidence of how social networks impact not only women's job opportunities but also the type of employment they can access. Separate analyses will be conducted for men and women, as well as urban and rural families.

Data

The family information used in this study is obtained from the Nicaragua Living Standards Measurement Survey 2005 carried out by the National Institute of Statistics and Censuses. This survey provides nationally representative data and detailed characteristics for each individual within a family.

The Encuesta Nacional de Hogares sobre Medicion de Nivel de Vida (EMNV) survey, which interviewed 5,000 families with 25,000 people, does not provide illustrative data at the municipality level. To determine the extent of the social network of the family, data from the Census conducted by

the National Institute of Statistics and Censuses (NISC) in 2005 will be used.

Relevance of the Policy

From a policy perspective, Nicaragua's poverty manifests in various forms, such as low income levels, high joblessness rates, and low salaries. These issues particularly affect women, presenting significant challenges in achieving gender parity. The findings of this empirical study will help identify economic activities where social networks and peer influences have beneficial effects. These non-market factors can greatly improve the welfare and economic prospects of women. For example, if women effectively utilize their social networks, a small number of women in influential labor positions can positively influence the entire group of women in their network.

In certain market opportunities, social networks may compensate for personal weaknesses. However, negative impacts stemming from social customs regarding women's behavior and responsibilities may contribute to the perpetuation of inequality of opportunities and hinder the empowerment of Nicaraguan women.

References

1. Ravallion, M., Chen, S., & Sangraula, P. (2007). New evidence on the urbanization of global poverty. Population and Development Review, 33(4), 667-701.
2. World Bank Conference on Development in Latin America and the Caribbean, Burki, S. J., Aiyer, S.-R., Hommes, R., & World Bank. (1997). Annual World Bank Conference on Development in Latin America and the Caribbean, 1996: Poverty and inequality: proceedings of a conference held in Bogota?, Colombia. Washington, D.C: World Bank.
3. Carter, M and E Katz (1997), "Separate spheres and the conjugal contract", in L Haddad, J Hoddinott and H Alderman (editors), Intra-household Resource Allocation in Developing Countries: Models, Methods and Policy, Johns Hopkins University Press, Baltimore, pages 95–111; also Hart, G (1991), "Engendering everyday
   

resistance: gender, patronage and production politics in rural Malaysia", Journal of Peasant Studies Vol 19, pages 93–121;and Hart, G (1997), "From 'rotten wives' to 'good mothers': household models and the limits of economism", IDS Bulletin Vol 28, pages 14–25.

- Friedemann-Sanchez, G (2006), “Assets in intra-household bargaining among women workers in Colombia’s cut flower industry”, Feminist Economics Vol 12, No 1–2, pages 247–269.
- Gupta, S (2006), “Her money, her time: women’s earnings and their housework hours”, Social Science Research Vol 35, pages 975–999.
- Kamo, Y (2000), “‘He said, she said’: assessing discrepancies in husbands’ and wives’ reports on the division of household labour”, Social Science Research Vol 29, pages 459–476.
- Jackson, M. (2003), “A Survey of Models of Network Formation: Stability and Efficiency,” in G. Demange and M.

Wooders (eds.) Group Formation in Economics: Networks, Clubs, and Coalitions, Cambridge University Press: Cambridge.
Bertrand, M., L. Erzo, and M. Sendhil (2000), "Network Effects and Welfare Cultures," Quarterly Journal of Economics.