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Endogenous job contact networks

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  • Galeotti, Andrea
  • Merlino, Luca Paolo

Abstract

We develop a model where workers, anticipating the possibility of unemployment, invest in connections to access information about available jobs. The investment in connections is high when the job separation rate is moderate, otherwise the investment in connections is low. The response of network investment to labor market conditions generates novel predictions. In particular, the probability that a worker finds a new job via his connections increases in the separation rate, when the separation rate is low, and it decreases otherwise. These predictions are supported by the empirical patterns which we document for the UK labor market.

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Bibliographic Info

Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2010-14.

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Date of creation: 04 May 2010
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Publication status: published
Handle: RePEc:ese:iserwp:2010-14

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Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
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Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
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Citations

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Cited by:
  1. Caliendo, Marco & Schmidl, Ricarda & Uhlendorff, Arne, 2010. "Social Networks, Job Search Methods and Reservation Wages: Evidence for Germany," IZA Discussion Papers 5165, Institute for the Study of Labor (IZA).
  2. Cabrales, Antonio & Calvó-Armengol, Antoni & Zenou, Yves, 2010. "Social Interactions and Spillovers," Research Papers in Economics, Stockholm University, Department of Economics 2010:20, Stockholm University, Department of Economics.
  3. repec:ese:iserwp:2011-21 is not listed on IDEAS
  4. João Miguel Ejarque, 2010. "A search model with a quasi network," 2010 Meeting Papers, Society for Economic Dynamics 597, Society for Economic Dynamics.
  5. Lorenzo Cappellari & Konstantinos Tatsiramos, 2011. "Friends’ Networks and Job Finding Rates," Discussion Papers in Economics, Department of Economics, University of Leicester 11/40, Department of Economics, University of Leicester.
  6. João Miguel Ejarque, 2009. "A Search Model with a Quasi-Network," Discussion Papers, University of Copenhagen. Department of Economics 10-23, University of Copenhagen. Department of Economics, revised Sep 2010.
  7. Jacques Durieu & Hans Haller & Philippe Solal, 2011. "Nonspecific Networking," Games, MDPI, Open Access Journal, MDPI, Open Access Journal, vol. 2(1), pages 87-113, February.
  8. Caria, Antonia Stefano & Hassen, Ibrahim Worku, 2013. "The formation of job referral networks: Experimental evidence from ubran Ethiopia:," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 1282, International Food Policy Research Institute (IFPRI).

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