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The Effects of Social Networks on Employment and Inequality

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  • Matt Jackson

Abstract

We develop a model where agents obtain information about job opportunities through an explicitly modeled network of social contacts. We show that employment is positively correlated across time and agents. Moreover, unemployment exhibits duration dependence: the probability of obtaining a job decreases in the length of time that an agent has been unemployed. Finally, we examine inequality between two groups. If staying in the labor market is costly and one group starts with a worse employment status, then that group's drop-out rate will be higher and their employment prospects will be persistently below that of the other group.

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Bibliographic Info

Paper provided by UCLA Department of Economics in its series Theory workshop papers with number 658612000000000032.

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Date of creation: 25 Sep 2003
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Handle: RePEc:cla:uclatw:658612000000000032

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