IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Job Information Networks, Neighborhood Effects, and Inequality

  • Yannis M. Ioannides
  • Linda Datcher Loury

This paper explores the theoretical and empirical literature to examine the use by different social groups of informal sources of information provided by friends, relatives, and acquaintances during job search and its consequences for the job market. It also addresses the role of network structure and size, the resource endowments of contacts, and nature of the links between contacts to explain differences in the effects of job information networks. In doing so, the paper also turns to the sociology literature on job information networks and provides an economic perspective on such sociological concepts as strong versus weak ties, inbreeding, distance from structural holes, etc. The paper distinguishes between models of exogenous job information networks, that is where individuals obtain job-related information through a given social structure, and endogenous job information networks, which are social networks that result from individuals' uncoordinated actions. The paper pays special attention to such issues as physical and social proximity and sharing of information and discusses them in the context of the recent social interactions and neighborhood effects literature. Finally, the paper outlines a model that integrates job information networks, where interactions occur in business cycle frequencies, with the dynamics of human capital formation, which include the joint effects of parental, community and neighborhood human capital, and are set in life cycle frequencies, for the purpose of organizing suggestions for future research and examining earned income inequality.

If 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.

File URL: http://www.aeaweb.org/articles.php?doi=10.1257/0022051043004595
Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by American Economic Association in its journal Journal of Economic Literature.

Volume (Year): 42 (2004)
Issue (Month): 4 (December)
Pages: 1056-1093

as
in new window

Handle: RePEc:aea:jeclit:v:42:y:2004:i:4:p:1056-1093
Note: DOI: 10.1257/0022051043004595
Contact details of provider: Web page: https://www.aeaweb.org/journal
Email:


More information through EDIRC

Order Information: Web: https://www.aeaweb.org/subscribe.html

References listed on IDEAS
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.:

as in new window
  1. Antoni Calvó-Armengol & Thierry Verdier & Yves Zenou, 2004. "Strong and Weak Ties in Employment and Crime," Working Papers 180, Barcelona Graduate School of Economics.
  2. Datcher, Linda, 1983. "The Impact of Informal Networks of Quit Behavior," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 491-95, August.
  3. Aizer, Anna & Currie, Janet, 2004. "Networks or neighborhoods? Correlations in the use of publicly-funded maternity care in California," Journal of Public Economics, Elsevier, vol. 88(12), pages 2573-2585, December.
  4. Michele Pellizzari, 2011. "Employers' Search and the Efficiency of Matching," British Journal of Industrial Relations, London School of Economics, vol. 49(1), pages 25-53, March.
  5. Pierre Cahuc & Fran�Ois Fontaine, 2009. "On the Efficiency of Job Search with Social Networks," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(3), pages 411-439, 06.
  6. D. Lee Heavner & Lance Lochner, 2002. "Social Networks and the Aggregation on Individual Decisions," NBER Working Papers 8979, National Bureau of Economic Research, Inc.
  7. Michele Pellizzari, 2010. "Do Friends and Relatives Really Help in Getting a Good Job?," ILR Review, Cornell University, ILR School, vol. 63(3), pages 494-510, April.
  8. Finneran, Lisa & Kelly, Morgan, 2003. "Social networks and inequality," Journal of Urban Economics, Elsevier, vol. 53(2), pages 282-299, March.
  9. Durlauf,S.N., 2000. "Bowling alone : a review essay," Working papers 29, Wisconsin Madison - Social Systems.
  10. Glenn C. Loury, 1976. "A Dynamic Theory of Racial Income Differences," Discussion Papers 225, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  11. Hedström, Peter & Kolm, Ann-Sofie & Åberg, Yvonne, 2003. "Social interactions and unemployment," Working Paper Series 2003:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  12. Durlauf, S.N., 1992. "A Theory of Persistent Income Inequality," Papers 47, Stanford - Institute for Thoretical Economics.
  13. Marianne Bertrand & Erzo F.P. Luttmer & Sendhil Mullainathan, 1998. "Network Effects and Welfare Cultures," NBER Working Papers 6832, National Bureau of Economic Research, Inc.
  14. Lippert, Steffen & Spagnolo, Giancarlo, 2004. "Networks of Relations," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 28, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  15. George J. Borjas, 1994. "Ethnicity, Neighborhoods, and Human Capital Externalities," NBER Working Papers 4912, National Bureau of Economic Research, Inc.
  16. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June.
  17. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
  18. Richard B. Freeman, 2002. "The labour market in the new information economy," LSE Research Online Documents on Economics 20062, London School of Economics and Political Science, LSE Library.
  19. Lippert, Steffen & Spagnolo, Giancarlo, 2005. "Networks of Relations and Social Capital," CEPR Discussion Papers 5078, C.E.P.R. Discussion Papers.
  20. Harry J. Holzer, 1986. "Informal Job Search and Black Youth Unemployment," NBER Working Papers 1860, National Bureau of Economic Research, Inc.
  21. Matthew O. Jackson, 2003. "A Survey of Models of Network Formation: Stability and Efficiency," Game Theory and Information 0303011, EconWPA.
  22. David M. Blau, 1992. "An Empirical Analysis of Employed and Unemployed Job Search Behavior," ILR Review, Cornell University, ILR School, vol. 45(4), pages 738-752, July.
  23. Adriana Kugler, 2002. "Employee referrals and efficiency wages," Economics Working Papers 647, Department of Economics and Business, Universitat Pompeu Fabra.
  24. Bayer, Patrick & Ross, Stephen L., 2005. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working Papers 8, Yale University, Department of Economics.
  25. Datcher-Loury, Linda, 1988. "Effects of Mother's Home Time on Children's Schooling," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 367-73, August.
  26. Dan Anderberg & Fredrik Andersson, 2007. "Stratification, Social Networks in the Labour Market, and Intergenerational Mobility," Economic Journal, Royal Economic Society, vol. 117(520), pages 782-812, 04.
  27. Kremer, Michael, 1997. "How Much Does Sorting Increase Inequality?," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 115-39, February.
  28. Tassier, Troy & Menczer, Filippo, 2008. "Social network structure, segregation, and equality in a labor market with referral hiring," Journal of Economic Behavior & Organization, Elsevier, vol. 66(3-4), pages 514-528, June.
  29. Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation by Skill," NBER Working Papers 5718, National Bureau of Economic Research, Inc.
  30. Borjas, George J, 1992. "Ethnic Capital and Intergenerational Mobility," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 123-50, February.
  31. Granovetter, Mark, 2000. "A Theoretical Agenda for Economic Sociology," Center for Culture, Organizations and Politics, Working Paper Series qt4mk4g08q, Center for Culture, Organizations and Politics of theInstitute for Research on Labor and Employment, UC Berkeley.
  32. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-93, May.
  33. Lynch, Lisa M, 1989. "The Youth Labor Market in the Eighties: Determinants of Re-employment Probabilities for Young Men and Women," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 37-45, February.
  34. Goyal, Sanjeev & Vega-Redondo, Fernando, 2007. "Structural holes in social networks," Journal of Economic Theory, Elsevier, vol. 137(1), pages 460-492, November.
  35. Borjas, George J., 1998. "To Ghetto or Not to Ghetto: Ethnicity and Residential Segregation," Journal of Urban Economics, Elsevier, vol. 44(2), pages 228-253, September.
  36. Topa, Giorgio, 1997. "Social Interactions, Local Spillovers and Unemployment," Working Papers 97-17, C.V. Starr Center for Applied Economics, New York University.
  37. Brian Krauth, 2000. "Social Interactions, Thresholds, and Unemployment in Neighborhoods," Econometric Society World Congress 2000 Contributed Papers 1638, Econometric Society.
  38. Falk, Armin & Kosfeld, Michael, 2003. "It's all about Connections: Evidence on Network Formation," IZA Discussion Papers 777, Institute for the Study of Labor (IZA).
  39. Harry J. Holzer, 1986. "Search Method Use by Unemployed Youth," NBER Working Papers 1859, National Bureau of Economic Research, Inc.
  40. Philip Oreopoulos, 2003. "The Long-Run Consequences Of Living In A Poor Neighborhood," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1533-1575, November.
  41. Linda Datcher Loury, 2004. "Some Job Contacts are More Equal Than Others: Earnings and Job Information Networks," Discussion Papers Series, Department of Economics, Tufts University 0404, Department of Economics, Tufts University.
  42. Brian Krauth, 1998. "A Dynamic Model of Job Networks and Persistent Inequality," Research in Economics 98-06-049e, Santa Fe Institute.
  43. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," NBER Working Papers 7580, National Bureau of Economic Research, Inc.
  44. Krauth, Brian V., 2004. "A dynamic model of job networking and social influences on employment," Journal of Economic Dynamics and Control, Elsevier, vol. 28(6), pages 1185-1204, March.
  45. Datcher, Linda P, 1982. "Effects of Community and Family Background on Achievement," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 32-41, February.
  46. Devine, Theresa J. & Kiefer, Nicolas M., 1991. "Empirical Labor Economics: The Search Approach," OUP Catalogue, Oxford University Press, number 9780195059366, March.
  47. Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2005. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working Papers 927, Economic Growth Center, Yale University.
  48. Harry J. Holzer, 1987. "Job search by employed and unemployed youth," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 40(4), pages 601-611, July.
  49. Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation," Harvard Institute of Economic Research Working Papers 1777, Harvard - Institute of Economic Research.
  50. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213.
  51. Oomes, Nienke, 2003. "Local trade networks and spatially persistent unemployment," Journal of Economic Dynamics and Control, Elsevier, vol. 27(11-12), pages 2115-2149, September.
  52. Blau, David M & Robins, Philip K, 1990. "Job Search Outcomes for the Employed and Unemployed," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 637-55, June.
  53. Page Jr., Frank H. & Wooders, Myrna, 2007. "Networks and clubs," Journal of Economic Behavior & Organization, Elsevier, vol. 64(3-4), pages 406-425.
  54. Linda Datcher-Loury, 1989. "Family Background and School Achievement among Low Income Blacks," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 528-544.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:aea:jeclit:v:42:y:2004:i:4:p:1056-1093. See general 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: (Jane Voros)

or (Michael P. Albert)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.