Social Interaction in Regional Labour Markets
AbstractSocial interaction, i.e. the interdependence of agents' behaviour via non-market activities, has recently become the focus of economic analysis. Social interaction has been used to explain various labour market outcomes. An important result arising from the literature is the proposition that labour markets are characterised by multiple equilibria. Thus, social interaction is used as an explanation for regional unemployment disparities. Building on this, we construct a Pissarides (2000) type search model with social interaction. Despite social interaction, this type of model is characterised by only one stable equilibrium. Using a unique data set on un-/employment spell data for Germany we analyse whether multiple equilibria in regional labour markets exist. After controlling for structural differences we are able to show that the data supports the assumption of a unique equilibrium. As such, social interaction cannot explain regional unemployment disparities.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Regional Science Association in its series ERSA conference papers with number ersa06p43.
Date of creation: Aug 2006
Date of revision:
Contact details of provider:
Postal: Welthandelsplatz 1, 1020 Vienna, Austria
Web page: http://www.ersa.org
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-14 (All new papers)
- NEP-GEO-2007-01-14 (Economic Geography)
- NEP-SOC-2007-01-14 (Social Norms & Social Capital)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Charles F. Manski, 2000.
"Economic Analysis of Social Interactions,"
NBER Working Papers
7580, National Bureau of Economic Research, Inc.
- Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 14(3), pages 115-136, Summer.
- 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.
- Alois Stutzer & Rafael Lalive, . "The Role of Social Work Norms in Job Searching and Subjective Well-Being," IEW - Working Papers, Institute for Empirical Research in Economics - University of Zurich 051, Institute for Empirical Research in Economics - University of Zurich.
- Stutzer, Alois & Lalive, Rafael, 2001. "The Role of Social Work Norms in Job Searching and Subjective Well-Being," IZA Discussion Papers 300, Institute for the Study of Labor (IZA).
- Steiner, Viktor, 2001. " Unemployment Persistence in the West German Labour Market: Negative Duration Dependence or Sorting?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 63(1), pages 91-113, February.
- Manning, Alan, 1992.
"Multiple equilibria in the British labour market : Some empirical evidence,"
European Economic Review, Elsevier,
Elsevier, vol. 36(7), pages 1333-1365, October.
- Manning, Alan, 1991. "Multiple Equilibria in the British Labour Market: Some Empirical Evidence," CEPR Discussion Papers, C.E.P.R. Discussion Papers 540, C.E.P.R. Discussion Papers.
- Nickell, Stephen & Layard, Richard, 1999.
"Labor market institutions and economic performance,"
Handbook of Labor Economics, Elsevier,
in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084
- Richard Layard & Stephen Nickell, 1998. "Labour Market Institutions and Economic Performance," CEP Discussion Papers, Centre for Economic Performance, LSE dp0407, Centre for Economic Performance, LSE.
- Nickell, S. & Layard, R., 1997. "Labour Market Institutions and Economic Performance," Papers, Centre for Economic Performance & Institute of Economics 23, Centre for Economic Performance & Institute of Economics.
- Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
- Harris SELOD & Yves ZENOU, 2001.
"Social Interactions, Ethnic Minorities and Urban Unemployment,"
Annales d'Economie et de Statistique, ENSAE,
ENSAE, issue 63-64, pages 183-214.
- Harris Selod & Yves Zenou, 2000. "Social Interactions, Ethnic Minorities and Urban Unemployment," Working Papers, Centre de Recherche en Economie et Statistique 2000-20, Centre de Recherche en Economie et Statistique.
- Edward L. Glaeser & Jose A. Scheinkman, 2001.
Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research
1914, Harvard - Institute of Economic Research.
- Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 26(2), pages 646-79, June.
- Kolm, Ann-Sofie, 2005. "Work norms and unemployment," Economics Letters, Elsevier, Elsevier, vol. 88(3), pages 426-431, September.
- Hosios, Arthur J, 1990. "On the Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 57(2), pages 279-98, April.
- J. Paul Elhorst, 2003. "The Mystery of Regional Unemployment Differentials: Theoretical and Empirical Explanations," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 17(5), pages 709-748, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier).
If references are entirely missing, you can add them using this form.