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Transitions Out Of Unemployment: The Role Of Social Networks' Topology And Firms' Recruitment Strategies

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  • Andrea Mario Lavezzi
  • Nicola Meccheri

Abstract

In this paper we adopt the probabilistic framework of Calv´o-Armengol and Jackson (2004) to study the effects of job contact networks on outof- unemployment transitions. In particular we evaluate the role of di erent network topologies vis-a-vis state-dependent probabilities of receiving information on vacancies, which we relate to different firms’recruitment strategies. We find that social connections produce sizable increases in upward mobility from unemployment and, in general,symmetric network topologies perform better than asymmetric ones. In addition, and most interestingly, these results strongly depends on the di erent hypotheses on the firms’ hiring process strategy. Furthermore, in scale-free networks the probability of transitions out of unemployment increases in the exponent of the power-law degree distribution, but its value is much lower than what obtainable in Poisson random networks.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Metroeconomica.

Volume (Year): 62 (2011)
Issue (Month): 1 (02)
Pages: 24-52

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Handle: RePEc:bla:metroe:v:62:y:2011:i:1:p:24-52

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  1. Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1056-1093, December.
  2. Cappellari, Lorenzo, 2004. "Earnings Mobility Among Italian Low Paid Workers," IZA Discussion Papers 1068, Institute for the Study of Labor (IZA).
  3. Matthew O. Jackson & Brian W. Rogers, 2007. "Meeting Strangers and Friends of Friends: How Random Are Social Networks?," American Economic Review, American Economic Association, vol. 97(3), pages 890-915, June.
  4. Mark Granovetter, 2005. "The Impact of Social Structure on Economic Outcomes," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 33-50, Winter.
  5. Matt Jackson, 2003. "The Effects of Social Networks on Employment and Inequality," Theory workshop papers 658612000000000032, UCLA Department of Economics.
  6. repec:att:wimass:9127 is not listed on IDEAS
  7. Checchi, Daniele & Ichino, Andrea & Rustichini, Aldo, 1999. "More equal but less mobile?: Education financing and intergenerational mobility in Italy and in the US," Journal of Public Economics, Elsevier, vol. 74(3), pages 351-393, December.
  8. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Wiley Blackwell, vol. 60(3), pages 531-42, July.
  9. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-18, December.
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Cited by:
  1. Luciano Fanti & Luca Gori, 2009. "Endogenous lifetime in an overlapping generations small open economy," Discussion Papers 2009/92, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  2. Luciano Fanti & Luca Gori, 2009. "Endogenous fertility, endogenous lifetime and economic growth: the role of health and child policies," Discussion Papers 2009/91, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  3. Manuela Gussoni - Andrea Mangani, 2009. "The impact of public funding for innovation on firms' R&D investments: Do R&D cooperation and appropriability matter?," Discussion Papers 2009/90, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

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