Stratification, Social Networks in the Labour Market, and Intergenerational Mobility
AbstractYoung individuals, taking the locational choices made by their altruistic parents as given, decide whether or not to acquire skills. The use of location-specific word-of-mouth communication in the transmission of information about (skilled) job opportunities implies that the local social environment partly determines an individual's expected returns to education. Stratified equilibria, when they exist, are characterised by low intergenerational social mobility and inefficient use of talent. In addition, the equilibrium responses to factors that generally encourage education may, in stratified outcomes, be highly asymmetric across socio-economic groups. Non-stratified equilibria are likely to be destabilised by measures that encourage education. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 117 (2007)
Issue (Month): 520 (04)
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Other versions of this item:
- Anderberg, Dan & Andersson, Fredrik, 2003. "Stratification, social networks in the labour market, and intergenerational mobility," Discussion Papers, Research Unit: Market Processes and Governance SP II 2003-20, Social Science Research Center Berlin (WZB).
- Dan Anderberg and Fredrik Andersson, 2003. "Stratification, Social Networks in the Labour Market and Intergenerational Mobility," Royal Holloway, University of London: Discussion Papers in Economics 03/8, Department of Economics, Royal Holloway University of London, revised Dec 2003.
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