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Social Interactions and the Labor Market

Listed author(s):
  • Yves Zenou

To better understand the way social networks operate in the labor market, we propose two simple models where individuals help each other finding a job. In the first one, job information flows between individuals having a link with each other and we show that an equilibrium with a clustering of workers with the same status is likely to emerge since, in the long run, employed workers tend to be friends with employed workers. In the second model, individuals interact with both strong and weak ties and decide how much time they spend with each of them. As in Granovetter, this model stresses the strength of weak ties in finding a job because they involve a secondary ring of acquaintances who have contacts with networks outside ego’s network and therefore offer new sources of information on job opportunities. We then discuss some policy implications showing how these models can explain why ethnic minorities tend to experience higher unemployment rate than workers from the majority group.

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Article provided by Dalloz in its journal Revue d'économie politique.

Volume (Year): 123 (2013)
Issue (Month): 3 ()
Pages: 307-331

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Handle: RePEc:cai:repdal:redp_233_0307
Contact details of provider: Web page: http://www.cairn.info/revue-d-economie-politique.htm

References listed on IDEAS
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  1. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1997. "The Rise and Decline of the American Ghetto," NBER Working Papers 5881, National Bureau of Economic Research, Inc.
  2. Battu, Harminder & Mwale, McDonald & Zenou, Yves, 2005. "Oppositional Identities and the Labor Market," IZA Discussion Papers 1852, Institute for the Study of Labor (IZA).
  3. Addison, John T. & Portugal, Pedro, 1998. "Job Search Methods and Outcomes," ZEW Discussion Papers 98-41, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Sergio Currarini & Paolo Pin & Matthew O. Jackson, 2007. "An Economic Model of Friendship: Homophily, Minorities and Segregation," Working Papers 2007_20, Department of Economics, University of Venice "Ca' Foscari".
  5. 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.
  6. Damm, Anna Piil, 2006. "Ethnic Enclaves and Immigrant Labour Market Outcomes: Quasi-Experimental Evidence," Working Papers 06-4, University of Aarhus, Aarhus School of Business, Department of Economics.
  7. Wahba, Jackline & Zenou, Yves, 2004. "Density, Social Networks and Job Search Methods: Theory and Application to Egypt," Working Paper Series 629, Research Institute of Industrial Economics.
  8. Antoni Calvó-Armengol & Thierry Verdier & Yves Zenou, 2004. "Strong and Weak Ties in Employment and Crime," Working Papers 180, Barcelona Graduate School of Economics.
  9. Yannis M. Ioannides, 2012. "From Neighborhoods to Nations: The Economics of Social Interactions," Economics Books, Princeton University Press, edition 1, number 9892.
  10. Fredrik Anderson & Simon Burgess & Julia Lane, 2009. "Do as the Neighbors Do: The Impact of Social Networks on Immigrant Employees," The Centre for Market and Public Organisation 09/219, Department of Economics, University of Bristol, UK.
  11. Battu, Harminder & Seaman, Paul & Zenou, Yves, 2004. "Job Contact Networks and the Ethnic Minorities," Working Paper Series 628, Research Institute of Industrial Economics.
  12. Patrick Bayer & Stephen L. Ross, 2004. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Econometric Society 2004 North American Summer Meetings 495, Econometric Society.
  13. Calvo-Armengol, Antoni & Zenou, Yves, 2005. "Job matching, social network and word-of-mouth communication," Journal of Urban Economics, Elsevier, vol. 57(3), pages 500-522, May.
  14. Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1056-1093, December.
  15. Andersson, Fredrik & Burgess, Simon & Lane, Julia, 2009. "Do as the Neighbors Do: The Impact of Social Networks on Immigrant Employment," IZA Discussion Papers 4423, Institute for the Study of Labor (IZA).
  16. Selod, Harris & Zenou, Yves, 2005. "City Structure, Job Search and Labour Discrimination. Theory and Policy Implications," CEPR Discussion Papers 5009, C.E.P.R. Discussion Papers.
  17. Scott A. Boorman, 1975. "A Combinatorial Optimization Model for Transmission of Job Information through Contact Networks," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 216-249, Spring.
  18. Edin, Per-Anders & Fredriksson, Peter & Åslund, Olof, 2000. "Ethnic Enclaves and the Economic Success of Immigrants - Evidence from a Natural Experiment," Working Paper Series 2000:21, Uppsala University, Department of Economics.
  19. Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
  20. Holzer, Harry J, 1988. "Search Method Use by Unemployed Youth," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 1-20, January.
  21. Patacchini, Eleonora & Zenou, Yves, 2008. "The strength of weak ties in crime," European Economic Review, Elsevier, vol. 52(2), pages 209-236, February.
  22. Sanjeev Goyal, 2007. "Introduction to Connections: An Introduction to the Economics of Networks," Introductory Chapters, in: Connections: An Introduction to the Economics of Networks Princeton University Press.
  23. Giorgio Topa, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 261-295.
  24. Gregg, Paul & Wadsworth, Jonathan, 1996. "How Effective Are State Employment Agencies? Jobcentre Use and Job Matching in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 443-467, August.
  25. Zenou, Yves, 2011. "Explaining the Black/White Employment Gap: The Role of Weak Ties," CEPR Discussion Papers 8582, C.E.P.R. Discussion Papers.
  26. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-1418, December.
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