Job Contact Networks, Inequality and Aggregate Output
AbstractIn this paper we study the effects of social networks on wage inequality and aggregate production. In particular, we consider a simplified version of the model by Calvo'-Armengol and Jackson (2003), with good and bad jobs and skilled and unskilled workers. Our findings are: i) increasing the number of social links increases aggregate output and may reduce inequality; ii) given a number of social connections, output increases if the average distance among worker decreases; iii) a more mixed and well-integrated society, that is a society in which heterogeneous workers share social links, produces more output and less inequality than a society in which some workers are isolated, when productivity of the most productive agents in the best jobs is sufficiently low. We draw some policy implications from these results.
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Bibliographic InfoPaper provided by Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy in its series Discussion Papers with number 2004/42.
Date of creation: 01 Jan 2004
Date of revision:
Social Networks; Wage Inequality; Aggregate Output;
Find related papers by JEL classification:
- A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
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- Lorenzo Corsini & Pier Mario Pacini & Luca Spataro, 2010. "Workers' Choice on Pension Schemes: an Assessment of the Italian TFR Reform Through Theory and Simulations," Discussion Papers, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy 2010/96, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
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