Market and Network Theories of the Transition from High School to Work: Their Application to Industrialized Societies

The transition from high school to work creates serious problems for American youths and employers. Since single theories have difficulty conceptualizing the reasons for these problems, this paper reviews four theories that elucidate aspects: segmented labor market theory, human capital theory, signaling theory, and network theory. In addition, this review contrasts the American transition system with the transition systems in Japan, West Germany, and the United Kingdom to reveal practices and theoretical issues which are neither salient nor well studied in the American literature. We extend signaling theory to examine youths' use of signals, employers' use of dubious signals (e.g. age) while ignoring promising ones (e.g. grades), signals which are efficient in the short-term but not in the long-term. We extend network theory to include both personal contacts and institutional linkages. We note the ways poor signals may affect youths' plans and motivation and make them unresponsive to market demands, and the ways institutional networks may affect schooling and work-entry in the United States. Implications for theory, policy, and future research are also considered.