Labour Market Networks, Underclasses, and Inequality
AbstractAbout half of all vacancies are filled through networks of personal contact. We consider the implications of such labour market networks for inequality. Our central result is that referral networks display threshold behaviour. Above a critical density of referals, qualified workers at all levels of the network are recruited with probability one. Below the threshold, workers low in the hierachy are hired with probability zero: an underclass emerges. Although there is no discrimination, workers with the same distribution of ability at different layers of the network have bery different average incomes, reflecting differences of social capital in the form of labour market contacts.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Department of Economics, Finance and Accounting, National University of Ireland - Maynooth in its series Economics, Finance and Accounting Department Working Paper Series with number n660996.
Length: 23 pages
Date of creation: 1996
Date of revision:
labour market networks; underclasses; inequality;
Find related papers by JEL classification:
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D62 - Microeconomics - - Welfare Economics - - - Externalities
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.