Job Contact Networks, Inequality and Aggregate Economic Performance
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 CalvÃ²-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 reduces inequality; ii) given a number of social connections, output increases if the average distance among worker decreases; iii) a more mixed society, that is a society in which heterogeneous worker 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 Society for Computational Economics in its series Computing in Economics and Finance 2004 with number 164.
Date of creation: 11 Aug 2004
Date of revision:
networks; labor markets; mismatch; inequality; aggregate production;
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
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
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