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Social Interactions in Unemployment

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  • Lalive, Rafael

    ()
    (University of Lausanne)

Abstract

This paper studies the relevance of social interactions among the unemployed. Identification is based on a salient and selective extension of the potential duration of unemployment benefits. If social interactions are important, this policy change affects entitled individuals not only directly, but also indirectly by altering the duration of unemployment in the reference group. Moreover, this spillover effect of the policy should also be observed in the non-entitled group. Results indicate that there are strong indirect effects on the entitled, strong positive spillovers on the non-entitled, and that social interactions are about as important as the direct effects of the policy change.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 803.

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Length: 47 pages
Date of creation: Jun 2003
Date of revision:
Handle: RePEc:iza:izadps:dp803

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Related research

Keywords: social interactions; social multiplier; unemployment; quasi-experiment;

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References

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  1. Card, David & Levine, Phillip B., 2000. "Extended benefits and the duration of UI spells: evidence from the New Jersey extended benefit program," Journal of Public Economics, Elsevier, Elsevier, vol. 78(1-2), pages 107-138, October.
  2. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 1999. "Network Effects and Welfare Cultures," Working Papers, Harris School of Public Policy Studies, University of Chicago 9903, Harris School of Public Policy Studies, University of Chicago.
  3. van den Berg, Gerard J, 1990. "Nonstationarity in Job Search Theory," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 57(2), pages 255-77, April.
  4. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, Econometric Society, vol. 48(4), pages 817-38, May.
  5. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, Econometric Society, vol. 65(5), pages 1005-1028, September.
  6. Falk, Armin & Fischbacher, Urs, 2002. ""Crime" in the lab-detecting social interaction," European Economic Review, Elsevier, Elsevier, vol. 46(4-5), pages 859-869, May.
  7. Alois Stutzer & Rafael Lalive, 2004. "The Role of Social Work Norms in Job Searching and Subjective Well-Being," Journal of the European Economic Association, MIT Press, MIT Press, vol. 2(4), pages 696-719, 06.
  8. Winter-Ebmer, Rudolf, 1996. "Potential Unemployment Benefit Duration and Spell Length: Lessons from a Quasi-experiment in Austria," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1534, C.E.P.R. Discussion Papers.
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Citations

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Cited by:
  1. Cattaneo, Alejandra & Lalive, Rafael, 2006. "Social Interactions and Schooling Decisions," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5816, C.E.P.R. Discussion Papers.
  2. Yannis M. Ioannides & Giorgio Topa, 2010. "Neighborhood Effects: Accomplishments And Looking Beyond Them," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 50(1), pages 343-362.
  3. Stephen L. Ross, 2009. "Social Interactions within Cities: Neighborhood Environments and Peer Relationships," Working papers, University of Connecticut, Department of Economics 2009-31, University of Connecticut, Department of Economics.
  4. Federico Cingano & Alfonso Rosolia, 2006. "People I Know: Workplace Networks and Job Search Outcomes," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 600, Bank of Italy, Economic Research and International Relations Area.
  5. Piero Cipollone & Alfonso Rosolia, 2006. "Social Interactions in High School: Lessons from an Earthquake," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 596, Bank of Italy, Economic Research and International Relations Area.
  6. Raj Chetty & Amy Finkelstein, 2012. "Social Insurance: Connecting Theory to Data," NBER Working Papers 18433, National Bureau of Economic Research, Inc.

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