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Stratification, Social Networks in the Labour Market, and Intergenerational Mobility

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  • Dan Anderberg
  • Fredrik Andersson

Abstract

Young individuals, taking the locational choices made by their altruistic parents as given, decide whether or not to acquire skills. The use of location-specific word-of-mouth communication in the transmission of information about (skilled) job opportunities implies that the local social environment partly determines an individual's expected returns to education. Stratified equilibria, when they exist, are characterised by low intergenerational social mobility and inefficient use of talent. In addition, the equilibrium responses to factors that generally encourage education may, in stratified outcomes, be highly asymmetric across socio-economic groups. Non-stratified equilibria are likely to be destabilised by measures that encourage education. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.

Suggested Citation

  • 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, April.
    • Handle: RePEc:ecj:econjl:v:117:y:2007:i:520:p:782-812
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    Cited by:

    1. Bavaro, Michele & Patriarca, Fabrizio, 2022. "Referrals, intergenerational mobility and human capital accumulation," Economic Modelling, Elsevier, vol. 110(C).
    2. Mario Piacentini, 2008. "Migration Enclaves, Schooling Choices and Social Mobility," Development Working Papers 265, Centro Studi Luca d'Agliano, University of Milano.
    3. 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.
    4. Eggert, Wolfgang & Krieger, Tim & Meier, Volker, 2010. "Education, unemployment and migration," Journal of Public Economics, Elsevier, vol. 94(5-6), pages 354-362, June.
    5. Zuluaga, Blanca, 2013. "Quality of social networks and educational investment decisions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 43(C), pages 72-82.
    6. Boudreau, James W., 2010. "Stratification and growth in agent-based matching markets," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 168-179, August.
    7. Nawazuddin Ahmed & D. K. Nauriyal, 2024. "The Impact of Parents’ Educational and Occupational Footprints on Children: Evidence From India," Journal of South Asian Development, , vol. 19(1), pages 7-43, April.

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