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Social network structure, segregation, and equality in a labor market with referral hiring

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  • Tassier, Troy
  • Menczer, Filippo

Abstract

We examine the effects of social network structure on inequality in a model of referral hiring that focuses on groups rather than individuals. More random social networks yield higher employment rates than less random ones if the population is integrated or job vacancy information flows are random. However less random social networks allow for better containment of job information inside a group in a segregated population with non-random job information flows, resulting in higher employment rates. We report on the robustness of these findings with respect to the size of minority and majority groups and the amount of social segregation.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 66 (2008)
Issue (Month): 3-4 (June)
Pages: 514-528

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Handle: RePEc:eee:jeborg:v:66:y:2008:i:3-4:p:514-528

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Web page: http://www.elsevier.com/locate/jebo

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References

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  1. Farley, Reynolds, 1990. "Blacks, Hispanics, and White Ethnic Groups: Are Blacks Uniquely Disadvantaged?," American Economic Review, American Economic Association, vol. 80(2), pages 237-41, May.
  2. Card, David & Krueger, Alan B, 1992. "School Quality and Black-White Relative Earnings: A Direct Assessment," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 151-200, February.
  3. 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.
  4. Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
  5. O'Regan Katherine M. & Quigley John M., 1993. "Family Networks and Youth Access to Jobs," Journal of Urban Economics, Elsevier, vol. 34(2), pages 230-248, September.
  6. Smith, James P & Welch, Finis R, 1989. "Black Economic Progress after Myrdal," Journal of Economic Literature, American Economic Association, vol. 27(2), pages 519-64, June.
  7. Troy Tassier, 2006. "Labor Market Implications of Weak Ties," Southern Economic Journal, Southern Economic Association, vol. 72(3), pages 704-719, January.
  8. Matt Jackson, 2003. "The Effects of Social Networks on Employment and Inequality," Theory workshop papers 658612000000000032, UCLA Department of Economics.
  9. George J. Mailath & Larry Samuelson & Avner Shaked, . "Endogenous Inequality in Integrated Labor Markets with Two-sided Search," Penn CARESS Working Papers 90ff654ed11b714e3f7530c57, Penn Economics Department.
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Cited by:
  1. Matthew O. Jackson, 2003. "A Survey of Models of Network Formation: Stability and Efficiency," Game Theory and Information 0303011, EconWPA.
  2. Marc de Kamps & Daniel Ladley & Aistis Simaitis, 2012. "Heterogeneous Beliefs in Over-The-Counter Markets," Discussion Papers in Economics 13/03, Department of Economics, University of Leicester, revised Sep 2013.
  3. 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.
  4. Simon Gemkow & Michael Neugart, 2011. "Referral hiring, endogenous social networks, and inequality: an agent-based analysis," Journal of Evolutionary Economics, Springer, vol. 21(4), pages 703-719, October.
  5. Casella, Alessandra & Hanaki, Nobuyuki, 2008. "Information channels in labor markets: On the resilience of referral hiring," Journal of Economic Behavior & Organization, Elsevier, vol. 66(3-4), pages 492-513, June.
  6. Michael Neugart & Matteo G. Richiardi, 2012. "Agent-based models of the labor market," LABORatorio R. Revelli Working Papers Series 125, LABORatorio R. Revelli, Centre for Employment Studies.
  7. Mohamed Abdou & Nigel Gilbert, 2009. "Modelling the emergence and dynamics of social and workplace segregation," Mind and Society: Cognitive Studies in Economics and Social Sciences, Fondazione Rosselli, vol. 8(2), pages 173-191, December.

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