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Social interactions and unemployment

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Author Info

  • Hedström, Peter

    (Nuffield College, Oxford University)

  • Kolm, Ann-Sofie

    (Uppsala University and IFAU - Institute for Labour Market Policy Evaluation)

  • Åberg, Yvonne

    (Department of Sociology, Stockholm University)

Abstract

This paper is concerned with social interactions and their importance for unemployment. A theoretical model is specified in which the psychological costs of unemployment depend upon the unemployment level. The analysis reveals social multiplier effects, and shows that multiple unemployment equilibria may emerge. Data on all 20- to 24-year-olds living in Stockholm during the 1990s are used to test hypotheses from the model. The results show that individuals’ transition rates out of unemployment is strongly influenced by the unemployment level within their neighborhoods.

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Bibliographic Info

Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2003:15.

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Length: 41 pages
Date of creation: 10 Nov 2003
Date of revision:
Handle: RePEc:hhs:ifauwp:2003_015

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Keywords: Social interactions; social norms; social multipliers; unemployment;

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References

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Citations

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Cited by:
  1. Sören Blomquist & Vidar Christiansen, 2004. "Taxation and Heterogeneous Preferences," CESifo Working Paper Series 1244, CESifo Group Munich.
  2. Dos Santos Ferreira, Rodolphe & Lloyd-Braga, Teresa & Modesto, Leonor, 2014. "Employment Dynamics and Redistributive Policies under Workers' Social Norms," IZA Discussion Papers 7888, Institute for the Study of Labor (IZA).
  3. Yannis M. Ioannides & Linda Datcher Loury, 2002. "Job Information Networks, Neighborhood Effects and Inequality," Discussion Papers Series, Department of Economics, Tufts University 0217, Department of Economics, Tufts University.
  4. Thomas K. Bauer & Michael Fertig & Matthias Vorell, 2011. "Neighborhood Eff ects and Individual Unemployment," Ruhr Economic Papers 0285, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  5. Adrian Chadi, . "Employed But Still Unhappy? On the Relevance of the Social Work Norm," Working Papers 201142, Institute of Spatial and Housing Economics, Munster Universitary.
  6. Tolciu, Andreia, 2008. "Is unemployment a consequence of social interactions? Seeking for a common research framework for economists and other social scientists," HWWI Research Papers 1-15, Hamburg Institute of International Economics (HWWI).
  7. Chadi, Adrian, 2011. "Employed but still unhappy? On the relevance of the social work norm," CAWM Discussion Papers 42, Center of Applied Economic Research Münster (CAWM), University of Münster.
  8. Österholm, Pär, 2004. "Estimating the Relationship between Age Structure and GDP in the OECD Using Panel Cointegration Methods," Working Paper Series 2004:13, Uppsala University, Department of Economics.
  9. Tolciu, Andreia, 2009. "What a difference peers can make: The impact of social (work) norms on unemployment duration," HWWI Research Papers 1-24, Hamburg Institute of International Economics (HWWI).
  10. Contini, Dalit & Richiardi, Matteo G., 2012. "Reconsidering the effect of welfare stigma on unemployment," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 229-244.
  11. Aronsson, Thomas & Blomquist, Sören, 2004. "Redistribution and Provision of Public Goods in an Economic Federation," UmeÃ¥ Economic Studies 636, Umeå University, Department of Economics.
  12. Joel van der Weele, 2007. "The Signalling Power of Sanctions in Collective Action Problems," Economics Working Papers ECO2007/10, European University Institute.
  13. Nordström Skans, Oskar, 2004. "Scarring effects of the first labour market experience: A sibling based analysis," Working Paper Series 2004:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  14. Hesselius, Patrik & Johansson, Per & Vikström, Johan, 2008. "Monitoring and norms in sickness insurance: empirical evidence from a natural experiment," Working Paper Series 2008:8, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  15. Caria, Antonia Stefano & Hassen, Ibrahim Worku, 2013. "The formation of job referral networks: Experimental evidence from ubran Ethiopia:," IFPRI discussion papers 1282, International Food Policy Research Institute (IFPRI).
  16. Andreia Tolciu, 2010. "The Economics of Social Interactions: An Interdisciplinary Ground for Social Scientists?," Forum for Social Economics, Springer, vol. 39(3), pages 223-242, October.

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