The Role Of Social Capital In Applicants Economics Essay
In the Soviet Union the system of higher education was not market based, as there was no market as an element of economic regulation. The emergence of market in former Soviet countries as a concept was primarily connected with the socioeconomic transformations that occurred in those nations. In contemporary Russia they do not only speak about markets but there is a wide range of studies focused on market research in several disciplines. Higher education market is of special interest for research as the good that is being sold and bought here is a credence good which quality depends not only on the seller, but also to a certain extent on the buyer. Taking into account human capital’s role the return of investments made in higher education can be evaluated only in a certain period.
The importance of higher education on labor market grows pushing the demand on higher education [1] . The goal of obtaining higher education can be considered as a strategic one, as it influences the level of income. In order to obtain the higher education an applicant has to overcome several entrance barriers. These barriers can be formed by entrance exams and / or tuition fees. Thus, the opportunity to receive higher education is connected with amount of financial and human capitals of applicant. [2]
The admission probability can be raised in several ways, i.e. by taking preparatory courses, by special training for USE (the Unified State Examination), [3] by taking private lessons, etc. In other words by investing in human capital. In general it makes it clear that applicant in order to influence the admission probability can form his / her own strategy by choosing different instruments for preparation for university examinations, considering applicant’s financial and time constraints. All possible options are available at a local market of higher education. These options are determined by several parameters such as number of universities within the local market, major-courses available, tuition fees, etc. The major question is surfacing in how particular options are being selected and considered as effective ones under different market structures?
While the debate over the role of social capital [4] was widely discussed in 1970s – mid 1980s (White, 1981; Bourdieu, 1986; Coleman, 1988) and is extensively employed by many researches nowadays (Portes, 1995; Putnam, 1995; Adler, 2002; Durlauf, 2002) here it is suggested to focus more attention on the role of social capital under different market structures in the case of applicant strategies. In order to make any evaluation we have to have certain information that will let us make effective choice of instruments for our strategy, considering our financial and time constraints. The presupposition is that availability of higher education depends not solely on financial and human capital, as it was stated at the outset – a particular type of social capital has a certain impact as well. Social capital itself produces unique opportunities for information access via social network. Applicant’s family, relatives, classmates, teachers and other significant ones can be viewed as the source of useful information. It is proposed that social capital plays an important role in applicants’ strategy choice and its role varies under different market structures. Although the social network approach has developed several models that can be used for different market studies, the question of the role of social network and distinguishing social ties within a family as an internal social capital under different market structures has not been thoroughly examined. Further research based on practical cases is needed to verify and improve current theoretical works.
Problem statement
The primary aim of the present study is to determine the role of social capital in applicants’ strategies on Russian regional markets of higher education. Within this broad purpose the following tasks will be accomplished:
Determining the role of internal social capital in applicants’ strategies on Russian regional markets of higher education.
Determening the role of external social capital in applicants’ strategies on Russian regional markets of higher education.
Determining significant factors of Russian regional markets structure
Putting forward hypotheses at this stage seems inexpedient, because of the complexity of predicting final results. However, in the part to follow some propositions will be made.
Research propositions:
Individuals with low income owe less amount of external social capital in comparison with individuals with higher income, since social capital requires financial investments.
Large entry in non-commercial department raises the use of external social capital while making applicant strategy choice, because external social capital reduces formal entrance barriers.
High degree of concentration in higher education market on a regional level produces no influence on internal social capital use, because internal social capital is least used in the process of applicants’ strategy formation.
Internal social capital plays a significant role in the university choice, as parents may influence their kids’ choice.
Large number of commercial students reduces the level of external social capital use, because the most significant role in entering university on a commercial bases plays financial capital.
High degree of concentration in higher education market on a regional level makes individuals use applicant strategies (i.e. taking preparatory courses, taking additional classes at school or private lessons, etc.) as an instrument in gaining external social capital, because this may have a positive influence on admission probability.
Definition of the key terms [5]
Applicants’ strategies – formal ways of preparation for university entrance examinations (i.e. taking access courses, taking additional classes at school or private lessons, special training for the USE (the Unified State Examination), etc).
External social capital – ties between individuals and organizations in the frame of social network the agent is being a member of. It is a rationalized use of social ties embedded into economic action. (Instead of economy being embedded in social relations, social relations are embedded in the economic system” (Polanyi [1944] 1957: 57))
Internal social capital – strong ties within the family. This is a type of social capital that presumably is not embedded into economic system and I am trying to analyze its role in a market economy.
Types of regional market of higher education – concentration indices on: level of concentration of doctors and candidates of science, professors, associate professors, handed applications, number of students admitted (non-commercial and commercial departments), total number of students in a university (non-commercial and commercial departments), number of BA graduates, number of specialists graduated, number of MA graduates (considering internal, extra-mural and evening schooling).
Professional significance of the study
This research study is of primary significance to social network theorists, economic sociologists, institutional economists, local authorities that are in charge of informational distribution. Social network theorists and economic sociologists may use the findings to develop deeper theoretical understanding of role of different types of social capital under different market structures. Social network researchers may use the results to advance understanding of the relationship between social capital and market structure. In addition, the instrumentation applied in this study provides a useful diagnostic for assessing a current situation in regional markets of higher education.
Ultimately this research contributes to the body of research, aimed at understanding of how internal and external social capital and market structure affect the process of applicant strategies formation, considering informational distribution aspect. This knowledge would also help local authorities who are in charge of informational distribution to provide targeted support, assessment and interventions that are more likely to strengthen perfect competition in higher education market and produce positive results on information spread among individuals in the region.
Limitations
This study findings will be limited by the selection of participating regions and size of the cities included in the survey. Generalizability, the extent to which the results can be applied to other populations, will be limited to large Russian cities with population of 800,000 people and above. The practices of using social capital described in this study may be generalized to towns with population of 800,000 people and above. The results gained may not be applied to cities with population of 800,000 people and above outside of Russia.
The further limitations will be caused by the method of data collection. The use of secondary data for higher education market structure description will constrict the bounds of the research.
Finally, there will be limitations concerning theoretical framework of the study. The initial model of applicants’ strategies includes only formal instruments, such as taking preparatory courses, taking additional classes at school or private lessons, etc. All informal practices, such as bribery, examination results falsification, etc. are not included in the analysis. Extending the pool of instruments may result in the enhanced validity of the findings.
II Literature review
A large body of literature on social networks provides a basis for the present study. This section will observe both theoretical and empirical studies in the field. The general theoretical framework of the research has been derived from several works concerning integral questions related to social capital and social network theories.
There are several approaches in defining social capital. Wellman (1997) has suggested that there seem to be at least two fundamentally different ways of using the term “social capital”. One way – exemplified by Putnam (1995) – conceives of social capital as a quality of groups (usually whole societies). It is partly cultural, partly socio-structural. It includes such things as rule of law, social integration, and trust. Other writers in this vein include Fukuyama (1995) and Loury (1987), as well as the apparent originators’ of the term, Hanifan (1920) and Jacobs (1961).
Another way – embodied by Burt (1992) – conceives of social capital as the value of an individual’s social relationships. It has been axiomatic in the social support literature since the 1970s (e.g., Cassel, 1974) that one’s relationships with others are a source of material, information and emotional aid. A more formal statement of this view – renamed social resource theory – is provided by Lin (1986). Similarly, in the organizational literature, one’s relationships have been seen as a source of power (Brass, 1992). In a somewhat different way, Burt (1992) suggests that certain configurations of relationships with others confer significant information and control benefits. This view is rooted in a long sociological tradition of viewing an actor’s position in a social network as determinant of its opportunities and constraints (Wellman, 1988).
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The whole variety of these approaches can be deducted to the three aggreagate ones that view social capital as: 1) a source of social control, 2) a source of family-mediated benefits, and 3) a source of resources mediated by nonfamily networks (Portes, 1998). In the present study the social network approach [7] will be applied along with Coleman distinguishing of internal social capital as meaningful connections within the family, in order to provide an insight of the role of internal and external (resource mediated by nonfamily) social capital in applicants’ strategies on Russian regional markets of higher education.
External social capital is embodied in social networks, social norms and trust, that can produce favorable conditions for effective coordination and cooperation for mutual benefits. External social capital can be interpreted through social nets because the connections provided by the social network can be used to mobilize additional resources of a different character like economic ones. Membership in social nets determines individual’s range of options and capability of limited resource command.
Within the scope of social network approach a conventional notion of social connections and social nets [8] has been accepted. Social connections can be defined as stable ties between people and organizations. Social network can be defined as the whole amount of stable (repeated and selective) connections.
The environment in which applicant has to choose an entrance strategy is characterized by the high level of uncertainty. Such resource as social network can be used as an instrument of uncertainty reduction. This particular trait of social networks is well described in David Stark empirical study “Assets for Uncertain Environments: Heterarchy in Postsocialist Firms” (2001). In this study the author views two types of obscurity, that market agents have to be faced with. These are: risks and uncertainty. The problem of risks can be solved easier as risks are calculable. The problem of uncertainty is more difficult as there is no possibility for estimation. There are different instruments that can be used in order to reduce the level of uncertainty. One of them as Stark has shown can be social networks.
What are the benefits of different types of connections is another important question. In the work “The strength of weak ties” (1973) Granovetter has studied social network effect on job applicants. He has raised a problem of risks that are connected with existence within closed communities with high social network density. Agents of such network are limited in access to external agents, which leads to further limitations in access to additional resources, such as information and economic resources, etc.
The significant aspect in question of the role of different types of social connections is its part in various market structures. Uzzi in his work “The Sources and Consequences of Embeddedness for the Economic Performance of Organizations: The Network Effect” (1996) provides thorough analysis of different types of social connections influence in the frame of market that is close to a perfect competition model. In his study Uzzi shows that economic action is embedded in social relations that sometimes can contribute to the process of exchange producing benefits for the agent, and sometimes can prevent from exchange. Thus, the role of internal and external social capital in agents strategies in a market, that is close to a perfect competition model is ambiguous. High level of emdeddedness from a certain moment can produce a significant decrease in economic effectiveness, producing negative externalities.
Methodology
This part of the proposal explains the methods that are going to be employed in carrying out the study, giving special emphasis to the analysis of data.
The market of higher education has its own peculiarities; in the present study Russian experience will be taken into account. [9]
The general research perspective is quantitative – it will mainly focus on hard primary data which will include data on surveyed kids entering university and their parents. Secondary data provided by the federal web-site www.edu.ru will be used to construct structure of regional markets of higher education in Russia. At this stage the number of cities has been already identified. There going to be 14 Russian cities involved in a survey: Krasnoyarsk, Samara, Ufa, Ekaterinburg, Saratov, Tomsk, Kazan, Voronezh, Nizhnij Novgorod, Perm, Rostov-na-Donu, Novosibirsk, Chelyabinsk, Omsk.
In this study will be made an attempt to evaluate the role of social capital in applicants’ strategies in Russian regional markets of higher education. For these purposes will be used logit regression models, where applicants’ strategies (taking preparatory courses, taking additional classes at school or private lessons, etc.) will be used as dependent variables.
Computing the concentration indices (HHI on faculty quality by university in each city) will be built a typology of markets being under consideration. Using the regression analysis significant factors that enforce the role of social capital in applicants’ strategies in Russian regional markets of higher education will be designated.
Summary of the results anticipated
The following part of the proposal reports on the results which are likely to be obtained with the methods mentioned. As stated in part 1, the study reported here will examine in detail the problems concerning the role of internal and external social capital in applicants’ strategies under regional markets of higher education. It is expected that individuals with low income owe less amount of external social capital in comparison with individuals with higher income, since external social capital requires financial investments. It is also anticipated that large entry in non-commercial department raises the use of external social capital while making applicant strategy choice, because external social capital reduces formal entrance barriers. High degree of concentration in higher education market on a regional level produces no influence on internal social capital use, because internal social capital is least used in the process of applicants’ strategy formation. Internal social capital is used not as a type of resource for goal achievements, but as meaningful connections that are used to share personal emotions, love, friendship, etc., but not to derive economic utility out of it. It is expected that large number of commercial students reduces the level of external social capital use, because the most significant role in entering university on a commercial bases plays financial capital. All in all it is expected that high degree of concentration in higher education market on a regional level makes individuals use applicant strategies (i.e. taking preparatory courses, taking additional classes at school or private lessons, etc.) as an instrument in gaining external social capital, because this may have a positive influence on admission probability, while internal social capital is not being used in this way.
The proposal is developed in terms of the specific research tasks posed in part 1.
The presentation of the results will use an appropriate pattern. The results will be reported accurately and objectively. Some complex data will be presented in tables. All other results will be reported in the narrative text. For instance the correspondence between the role of external social capital in applicants’ strategies and the structure of regional market of higher education (including the significance of each factor in the analysis provided and its suggested improvements) will be presented in a big summary table, where the relations between factors will be also demonstrated.
The study will have some major theoretical implications, confirming and expanding the existing social network model by suggesting internal social capital concept use, along with other similar studies, it may provide some useful basis for practical activities. However, additional research seems needed on quantifying the suggested factors in more detail in order to describe the problem in a more systematic way.
