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Social networks and labor market inequality between ethnicities and races

Author

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  • TOOMET, OTT
  • VAN DER LEIJ, MARCO
  • ROLFE, MEREDITH

Abstract

This paper analyzes the relationship between unexplained racial/ethnic wage differentials on the one hand and social network segregation, as measured by inbreeding homophily, on the other. Our analysis is based on both the US and Estonian surveys, supplemented with the Estonian telephone communication data. In the case of Estonia we consider the regional variation in economic performance of the Russian minority, and in the US case we consider the regional variation in black--white differentials. Our analysis finds a strong relationship between the size of the wage differential and network segregation: Regions with more segregated social networks exhibit larger unexplained wage gaps.

Suggested Citation

  • Toomet, Ott & Van Der Leij, Marco & Rolfe, Meredith, 2013. "Social networks and labor market inequality between ethnicities and races," Network Science, Cambridge University Press, vol. 1(3), pages 321-352, December.
    • Handle: RePEc:cup:netsci:v:1:y:2013:i:03:p:321-352_00
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    Cited by:

    1. Simonetta Longhi, 2020. "Racial wage differentials in developed countries," IZA World of Labor, Institute of Labor Economics (IZA), pages 365-365, October.
    2. Chih-Sheng Hsieh & Stanley I. M. Ko & Jaromír Kovářík & Trevon Logan, 2018. "Non-Randomly Sampled Networks: Biases and Corrections," NBER Working Papers 25270, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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