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Social network structure, segregation, and equality in a labor market with referral hiring

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  • Tassier, Troy
  • Menczer, Filippo

Abstract

We examine the effects of social network structure on inequality in a model of referral hiring that focuses on groups rather than individuals. More random social networks yield higher employment rates than less random ones if the population is integrated or job vacancy information flows are random. However less random social networks allow for better containment of job information inside a group in a segregated population with non-random job information flows, resulting in higher employment rates. We report on the robustness of these findings with respect to the size of minority and majority groups and the amount of social segregation.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:jeborg:v:66:y:2008:i:3-4:p:514-528
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    References listed on IDEAS

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    1. O'Regan Katherine M. & Quigley John M., 1993. "Family Networks and Youth Access to Jobs," Journal of Urban Economics, Elsevier, vol. 34(2), pages 230-248, September.
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    5. 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.
    6. Farley, Reynolds, 1990. "Blacks, Hispanics, and White Ethnic Groups: Are Blacks Uniquely Disadvantaged?," American Economic Review, American Economic Association, vol. 80(2), pages 237-241, May.
    7. Larry Samuelson & George J. Mailath & Avner Shaked, 2000. "Endogenous Inequality in Integrated Labor Markets with Two-Sided Search," American Economic Review, American Economic Association, vol. 90(1), pages 46-72, March.
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    9. Troy Tassier, 2006. "Labor Market Implications of Weak Ties," Southern Economic Journal, Southern Economic Association, vol. 72(3), pages 704-719, January.
    10. Smith, James P & Welch, Finis R, 1989. "Black Economic Progress after Myrdal," Journal of Economic Literature, American Economic Association, vol. 27(2), pages 519-564, June.
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    Cited by:

    1. Michael Neugart & Matteo G. Richiardi, 2012. "Agent-based models of the labor market," LABORatorio R. Revelli Working Papers Series 125, LABORatorio R. Revelli, Centre for Employment Studies.
    2. 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.
    3. Nakajima, Ryo & Tamura, Ryuichi & Hanaki, Nobuyuki, 2010. "The effect of collaboration network on inventors' job match, productivity and tenure," Labour Economics, Elsevier, vol. 17(4), pages 723-734, August.
    4. Robert L. Axtell & Omar A. Guerrero & Eduardo L'opez, 2019. "Frictional Unemployment on Labor Flow Networks," Papers 1903.04954, arXiv.org.
    5. Jafar, K, 2009. "Social networks and labour market:The experience of Malayalee workers in Bangalore, India," MPRA Paper 64754, University Library of Munich, Germany.
    6. De Kamps, Marc & Ladley, Daniel & Simaitis, Aistis, 2014. "Heterogeneous beliefs in over-the-counter markets," Journal of Economic Dynamics and Control, Elsevier, vol. 41(C), pages 50-68.
    7. Matthew O. Jackson, 2003. "A survey of models of network formation: Stability and efficiency," Working Papers 1161, California Institute of Technology, Division of the Humanities and Social Sciences.
    8. Neugart, Michael & Zaharieva, Anna, 2018. "Social Networks, Promotions, and the Glass-Ceiling Effect," Center for Mathematical Economics Working Papers 601, Center for Mathematical Economics, Bielefeld University.
    9. Simon Gemkow & Michael Neugart, 2011. "Referral hiring, endogenous social networks, and inequality: an agent-based analysis," Journal of Evolutionary Economics, Springer, vol. 21(4), pages 703-719, October.
    10. Axtell, Robert L. & Guerrero, Omar A. & López, Eduardo, 2016. "The Network Composition of Aggregate Unemployment," MPRA Paper 68962, University Library of Munich, Germany.
    11. Casella, Alessandra & Hanaki, Nobuyuki, 2008. "Information channels in labor markets: On the resilience of referral hiring," Journal of Economic Behavior & Organization, Elsevier, vol. 66(3-4), pages 492-513, June.
    12. repec:spr:jeicoo:v:13:y:2018:i:3:d:10.1007_s11403-017-0198-z is not listed on IDEAS
    13. Martín-Román, Ángel L. & Cuéllar Martín, Jaime & Moral, Alfonso, 2018. "Labor supply and the business cycle: The “Bandwagon Worker Effect”," MPRA Paper 89870, University Library of Munich, Germany.
    14. Mohamed Abdou & Nigel Gilbert, 2009. "Modelling the emergence and dynamics of social and workplace segregation," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 8(2), pages 173-191, December.
    15. Marie T. Mora & Alberto Dávila & James Boudreau, 2016. "Social networks and Black–White differentials in public employment agency usage among mature job seekers," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(2), pages 433-448, March.
    16. Araujo, Luis & Minetti, Raoul, 2011. "Knowledge sharing and the dynamics of social capital," European Economic Review, Elsevier, vol. 55(8), pages 1109-1119.

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