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Local social capital and geographical mobility

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  • Quentin David

    () (CREA, University of Luxembourg)

  • Alexandre Janiak
  • Etienne Wasmer

Abstract

In this paper, we attempt to understand the determinants of mobility through introducing the concept of local social capital. Investing in local ties is rational when workers do not expect to move to another region, and reciprocally, once local social capital is accumulated, incentives to move are reduced. We build a model to illustrate several types of complementarities: observationally close individuals may take di¤erent paths characterized by high local social capital and low mobility vs. low social capital and high propensity to move. Employment protection reinforces the accumulation of local social capital and thus reduces mobility. Externalities generate multiple equilibria in which mobility and social capital are negatively correlated across equilibria. European data supports the theory: the South of Europe is characterized by both low mobility and local social capital, while the North of Europe has higher mobility and a more general type of social capital. Within a country and at the individual level, more social capital is associated with lower mobility.

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Bibliographic Info

Paper provided by Center for Research in Economic Analysis, University of Luxembourg in its series CREA Discussion Paper Series with number 09-11.

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Date of creation: 2009
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Handle: RePEc:luc:wpaper:09-11

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Keywords: European unemployment; Geographical mobility; Social capital;

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References

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  1. Wasmer, Etienne, 2002. "Interpreting Europe and US Labor Markets Differences: The Specificity of Human Capital Investments," IZA Discussion Papers 549, Institute for the Study of Labor (IZA).
  2. Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
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  4. David, Quentin & Janiak, Alexandre & Wasmer, Etienne, 2010. "Local social capital and geographical mobility," Journal of Urban Economics, Elsevier, vol. 68(2), pages 191-204, September.
  5. Hassler, John & Mora, José V Rodríguez & Storesletten, Kjetil & Zilibotti, Fabrizio, 2001. "A Positive Theory of Geographic Mobility and Social Insurance," CEPR Discussion Papers 2964, C.E.P.R. Discussion Papers.
  6. Luis Ubeda & Antonio Spilimbergo, 2002. "A Model of Multiple Equilibria in Geographic Labor Mobility," IMF Working Papers 02/31, International Monetary Fund.
  7. Quentin David & Alexandre Janiak & Etienne Wasmer, 2008. "Local social capital and geographical mobility. A theory," Documentos de Trabajo 248, Centro de Economía Aplicada, Universidad de Chile.
  8. Nickell, S. & Layard, R., 1997. "Labour Market Institutions and Economic Performance," Papers 23, Centre for Economic Performance & Institute of Economics.
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  10. Cahuc, Pierre & Fontaine, François, 2002. "On the Efficiency of Job Search with Social Networks," IZA Discussion Papers 583, Institute for the Study of Labor (IZA).
  11. Algan, Yann & Cahuc, Pierre, 2005. "The Roots of Low European Employment: Family Culture?," CEPR Discussion Papers 5169, C.E.P.R. Discussion Papers.
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  13. Michael S. Dahl & Olav Sorenson, 2010. "The Migration of Technical Workers," NBER Chapters, in: Cities and Entrepreneurship National Bureau of Economic Research, Inc.
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  15. Lamo, Ana & Fredriksson, Peter & Messina, Julian & Peri, Giovanni & Wasmer, Etienne, 2005. "Macroeconomics of Education," Open Access publications from Sciences Po info:hdl:2441/9064, Sciences Po.
  16. repec:ese:iserwp:2006-33 is not listed on IDEAS
  17. Alberto F. Alesina & Yann Algan & Pierre Cahuc & Paola Giuliano, 2010. "Family Values and the Regulation of Labor," NBER Working Papers 15747, National Bureau of Economic Research, Inc.
  18. Luis Ubeda & Antonio Spilimbergo, 2002. "Family Attachment and the Decision to Move by Race," IMF Working Papers 02/83, International Monetary Fund.
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  20. Kamhon Kan, 2006. "Residential Mobility and Social Capital," IEAS Working Paper : academic research 06-A005, Institute of Economics, Academia Sinica, Taipei, Taiwan.
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Citations

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Cited by:
  1. Alexandre Janiak, 2010. "Structural unemployment and the regulation of product market," Documentos de Trabajo 274, Centro de Economía Aplicada, Universidad de Chile.
  2. Yamamura, Eiji, 2010. "Homeownership and investment for social capital in Japan: Dynamic Panel approach," MPRA Paper 26182, University Library of Munich, Germany.
  3. Aida Caldera Sánchez & Dan Andrews, 2011. "To Move or not to Move: What Drives Residential Mobility Rates in the OECD?," OECD Economics Department Working Papers 846, OECD Publishing.
  4. Cahuc, Pierre & Carcillo, Stéphane, 2011. "Is Short-time Work a Good Method to Keep Unemployment Down?," CEPR Discussion Papers 8214, C.E.P.R. Discussion Papers.
  5. Alesina, Alberto & Algan, Yann & Cahuc, Pierre & Giuliano, Paola, 2010. "Family Values and the Regulation of Labor," IZA Discussion Papers 4747, Institute for the Study of Labor (IZA).
  6. Quentin David & Alexandre Janiak & Etienne Wasmer, 2009. "Local social capital and geographical mobility," CREA Discussion Paper Series 09-11, Center for Research in Economic Analysis, University of Luxembourg.
  7. Stephen Machin & Panu Pelkonen & Kjell Salvanes, 2008. "Education and Mobility," CEE Discussion Papers 0100, Centre for the Economics of Education, LSE.
  8. Alexandre Janiak, 2008. "Mobility in Europe - Why it is low, the bottlenecks, and the policy solutions," European Economy - Economic Papers 340, Directorate General Economic and Monetary Affairs, European Commission.

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