Distributional effects of hiring through networks
AbstractHow would a policy that bans the use of networks in hiring (e.g., anti-old boy network laws) affect welfare? To answer this question, we examine a variant of Galenianos (2013), a version of a random search model with two matching technologies: a standard matching function and worker networks. Our model has two types of workers, networked workers and non-networked workers. It is shown that the effects of such a policy on non-networked workers can be either positive or negative, depending on model parameters. In our calibration such a policy would make non-networked workers slightly worse off and networked workers substantially worse off.
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Bibliographic InfoPaper provided by Exeter University, Department of Economics in its series Discussion Papers with number 1309.
Date of creation: 2013
Date of revision:
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More information through EDIRC
random search; network; referral; policy analysis; welfare; dynamics.;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-09 (All new papers)
- NEP-DGE-2013-11-09 (Dynamic General Equilibrium)
- NEP-GTH-2013-11-09 (Game Theory)
- NEP-LAB-2013-11-09 (Labour Economics)
- NEP-LMA-2013-11-09 (Labor Markets - Supply, Demand, & Wages)
- NEP-MAC-2013-11-09 (Macroeconomics)
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