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Virtual social currencies for unemployed people: social networks and job market access

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  • Maëlle Della Peruta

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis [UNS])

  • Dominique Torre

    ()
    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis [UNS])

Abstract

Alternative currencies continue to develop all around the world, taking various forms (material or immaterial) and ful ll various functions. They are created in order to promote the local economy development and to ght against social exclusion. They are principally aimed to low income people (retired or unemployed people, or people who are living with a low wage). In this paper, we analyze the particular case of virtual currency circulation inside a local community of unemployed people. We elaborate on the assumptions that the organization of LETS and the circulation of complementary currencies have two properties: (i) they help unemployed workers to overcome the double coincidence of want necessity of an informal sector founded on barter exchange; (ii) they help to maintain and develop workers' skills outside job, helping them to observe opportunities of employment even as long-term unemployed workers. We study the global properties of a job market associating traditional short-term and long-term unemployment to the organization of LETS. Using a theoretical Pissarides-style model, we nd that the initial level of trust of agents in the complementary currency(cies) but also the e ective properties of his(these) currency(cies) are crucial for LETS to become permanent institutions. We also nd that if the stationary equilibrium of the job-market includes LETS, then LETS have a positive in uence on the rate of employment, on the expected utility of employed workers, and are Pareto improving when the benchmark case is a job market without any LETS.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number halshs-00856480.

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Date of creation: 2013
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Handle: RePEc:hal:wpaper:halshs-00856480

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Keywords: Social currencies; complementary currencies; unemployment; informal sector.;

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  1. Pissarides, Christopher A, 1992. "Loss of Skill during Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1371-91, November.
  2. Edin, Per-Anders & Gustavsson, Magnus, 2004. "Time Out of Work and Skill Depreciation," Working Paper Series 2004:14, Uppsala University, Department of Economics.
  3. Richard Desjardins & Arne Jonas Warnke, 2012. "Ageing and Skills: A Review and Analysis of Skill Gain and Skill Loss Over the Lifespan and Over Time," OECD Education Working Papers 72, OECD Publishing.
  4. Boheim, Rene & Taylor, Mark P., 2002. "The search for success: do the unemployed find stable employment?," Labour Economics, Elsevier, vol. 9(6), pages 717-735, December.
  5. Jacob Mincer & Haim Ofek, 1982. "Interrupted Work Careers: Depreciation and Restoration of Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 3-24.
  6. Jér�me Blanc, 2009. "Contraintes Et Choix Organisationnels Dans Les Dispositifs De Monnaies Sociales," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 80(4), pages 547-577, December.
  7. Yves Bourdet & Inga Persson, 1991. "Politique de l'emploi et durée du chômage : une comparaison franco-suédoise," Revue de l'OFCE, Programme National Persée, vol. 38(1), pages 65-92.
  8. Gomez, Georgina M. & Helmsing, A.H.J., 2008. "Selective Spatial Closure and Local Economic Development: What Do We Learn from the Argentine Local Currency Systems?," World Development, Elsevier, vol. 36(11), pages 2489-2511, November.
  9. Yves Bourdet & Inga Persson, 1991. "Chômage des jeunes et fonctionnement du marché du travail : les cas français et suédois," Économie et Statistique, Programme National Persée, vol. 249(1), pages 39-51.
  10. Flaig, Gebhard & Licht, Georg & Steiner, Viktor, 1993. "Testing for state dependence effects in a dynamic model of male unemployment behaviour," ZEW Discussion Papers 93-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  11. M.S. Peacock, 2000. "Local Exchange Trading Systems: A Solution to the Employment Dilemma?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 71(1), pages 55-78, 03.
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