Beyond College For All: Career Paths for the Forgotten Half

Chapter 2. Market and Network Theories of the High School–to–Work Transition

24 Chapter 2 Market and Network Theories of the High School–to–Work Transition T he transition from high school to work has attracted concern because of youths’ great difficulties in making this transition.1 Many high school graduates spend their first years after school unemployed or job hopping, with consequent loss of training and productivity. Work-bound youths also have great problems in school that may be related to their anticipated problems entering work. The problem is hard to conceptualize because it involves many complexities. Is the problem due to shortcomings in one or more of the parties (youths, schools, or employers)? Is it due to problems of information flow between them? Or is it due to problems in their relationships? Sorting out essential elements and causal mechanisms is difficult. We need some way to gain conceptual clarity about these complex phenomena. This chapter reviews four theories of the school-to-work transition. Each theory provides a coherent perspective, supported by a body of research. Each theory has strengths and weaknesses for explaining the school-to-work transition—that is, each explains some aspects well and other aspects poorly. This chapter reviews the strengths and weaknesses of each one. First, segmented labor market theory shows how these problems arise from the structure of labor markets, although the theory is vague about the transition and the way in which individuals are selected and respond. Second, human capital theory contends that youths’ work-entry problems arise because of their own deficiencies, yet several features of the school-to-work transition do not fit this interpretation and suggest that poor information prevents human capital from being identified and developed. Third, signaling theory explains the Market and Network Theories 25 economic constraints on the use of information, but it ignores noneconomic constraints. Fourth, network theory explains how personal and institutional networks improve information flow and affect the hiring process. Since institutional networks between high schools and employers are rare in the United States, we review how such networks operate in other nations (Japan, Germany, and the United Kingdom), and how they aid youths’ work entry by improving both signals to employers and incentives for youth. This review considers only the transition from high school to work. Although transitions from higher education and from other levels of education are important, and some similarities apply across various levels, they are not considered here. Segmented Labor Market Theory Segmented labor market theory points to some barriers, particularly discrimination, that prevent individuals from entering certain industries , sectors, or firms (Katz 1986; Tolbert 1982; Dickens and Lang 1985; Gordon 1972; England and Farkas 1986). Such structural barriers may restrict females, minorities, and youth from access to betterpaid industries, sectors, or firms. Moreover, internal labor markets within firms limit and channel career advancement opportunities (Doeringer and Piore 1971; Rosenbaum 1984). In addition, individuals are not paid for their human capital value but rather are placed in a labor “queue,” ranked by their value and other attributes, and this is the sequence in which they are allocated jobs, which pay predetermined amounts (Thurow 1975). Thus, if youth are always placed at the back of the queue because of their age and lack of experience, then employers never even try to examine other aspects of their value. Segmented labor market theory contends that labor markets are highly stratified. Research has shown that labor markets are segmented (Althauser and Kalleberg 1981; Osterman 1980; Sørensen 1977; Stolzenberg 1975) and that access to these segments is constrained by discrimination and credentials (Bills 1983; Bowles and Gintis 1976; Collins 1979; Crain 1984; Meyer 1977; Ornstein 1976; Rosenbaum 1984; Rosenthal and Hearn 1982; Spenner and Otto 1982). Segmented labor market theory contends that the segmented nature of the labor market secures the organizational control system and perpetuates a system of credentialism and inequality (Baron 1984; Cain 1976; Carline 1985; Collins 1975, 1979; Kanter 1977; Raffe 1981; Spenner 1995). For example, James Baron (1984, 55) notes that “Marxists argue that employers are motivated by a need to control the work 26 Beyond College for All force and use schooling to determine whether workers’ values and traits are appropriate for the organizational control system.” Similarly, Rosabeth Kanter (1977, 48) argues that “homosocial reproduction” occurs in organizations to “carefully guard power and privilege for those who fit in, for those they see as ‘their kind.’” Randall Collins (1979) also discusses the use of credentials and social...