http://www.iser.essex.ac.uk/publications/working-papers/iser/2009-03

What makes you popular among your high-school peers? And what are the economic gains from popularity later in life? We investigate these questions using survey data on high school friendship relations collected from male respondents to the Wisconsin Longitudinal Study (WLS), who were asked to report the names of up to three best friends from their senior class in high school. These friendship nominations allow us to distinguish students on the basis of the number of friendship nominations they give, which we term the out-degree of friendship, and the number of friendship nominations they receive, termed the in-degree. Some students receive many friendship nominations, reflecting their high social standing and popularity among schoolmates, while others receive few. Some nominate few others as friends, possibly reflecting a lack of initiative to participate socially; others display gregariousness - a high out-degree, reflecting a strong desire to be socially active and accepted. One of the biggest obstacles to research on social networks is that it is rarely possible to observe the complete network - as in the WLS, which only sampled one-third of the relevant school population. However, an advantage of the WLS is that it is a long-term study that also observed individuals' economic success in the labor market 35 years after high school. We develop a new method for dealing with data from partially-observed social networks, both to understand the nature of such networks in school and the longer-term consequences of early social engagement. We find evidence that the early family environment, school composition and school size play a significant role in shaping friendship networks. In particular, close maternal and sibling relationships have a strong positive effect on the in-degree and out-degree of friendship. Adolescents educated in larger and more homogenous schools also had significantly higher friendship levels. We then analyze the effect of the in-degree and out-degree of friendship on adult economic success as measured by each individual's level of earnings some 35 years later. While the out-degree (gregariousness) has no effect, we find a positive effect for in-degree (popularity). One additional friendship nomination in high school is associated with a 2 percent higher wage 35 years later. This is roughly equivalent to almost half the gain from an extra year of education. Shifting somebody from the bottom fifth to the top fifth of the school popularity distribution { in other words, turning a social reject into a star - would be predicted to yield him a 10 percent wage advantage. This work emphasizes the critical importance of the early development of social skills alongside cognitive and productive skills as a basis for economic success in adult life.

What makes you popular among your high-school peers? And what are the la- bor market returns to popularity? We investigate these questions using an objective measure of popularity derived from sociometric theory: the number of friendship nom- inations received from schoolmates. We provide novel evidence that early family en- vironment, school composition and school size play a signi*cant role in determining popularity. We show that the estimated wage return to one additional nomination is about 2 percent the popularity premium. This amounts to roughly 40 percent of the return to one more year of education. Working Paper 2009-03 2009-02-05 Gabriella Conti Department of Economics, University of Chicago http://home.uchicago.edu/~gconti/ Andrea Galeotti Department of Economics, University of Essex http://www.essex.ac.uk/economics/people/staff/agaleo.asp Gerrit Mueller Institute for Employment Research (IAB) Stephen Pudney Institute for Social and Economic Research spudney@essex.ac.uk http://www.iser.essex.ac.uk/home/spudney