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

  • Tassier, Troy
  • Menczer, Filippo

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.

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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 66 (2008)
Issue (Month): 3-4 (June)
Pages: 514-528

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Handle: RePEc:eee:jeborg:v:66:y:2008:i:3-4:p:514-528
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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  1. George J. Mailath & Larry Samuelson & Avner Shaked, . "Endogenous Inequality in Integrated Labor Markets with Two-sided Search," Penn CARESS Working Papers 90ff654ed11b714e3f7530c57, Penn Economics Department.
  2. Yannis M. Ioannides & Linda Datcher Loury, 2002. "Job Information Networks, Neighborhood Effects and Inequality," Discussion Papers Series, Department of Economics, Tufts University 0217, Department of Economics, Tufts University.
  3. Matt Jackson, 2003. "The Effects of Social Networks on Employment and Inequality," Theory workshop papers 658612000000000032, UCLA Department of Economics.
  4. Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
  5. Kenneth J. Arrow & Ron Borzekowski, 2004. "Limited network connections and the distribution of wages," Finance and Economics Discussion Series 2004-41, Board of Governors of the Federal Reserve System (U.S.).
  6. Farley, Reynolds, 1990. "Blacks, Hispanics, and White Ethnic Groups: Are Blacks Uniquely Disadvantaged?," American Economic Review, American Economic Association, vol. 80(2), pages 237-41, May.
  7. O'Regan, Katherine M. & Quigley, John M., 1992. "Family Networks and Youth Access to Jobs," University of California Transportation Center, Working Papers qt0b96s4b3, University of California Transportation Center.
  8. David Card & Alan Krueger, 1990. "School Quality and Black/White Relative Earnings: A Direct Assessment," Working Papers 652, Princeton University, Department of Economics, Industrial Relations Section..
  9. Smith, James P & Welch, Finis R, 1989. "Black Economic Progress after Myrdal," Journal of Economic Literature, American Economic Association, vol. 27(2), pages 519-64, June.
  10. Troy Tassier, 2006. "Labor Market Implications of Weak Ties," Southern Economic Journal, Southern Economic Association, vol. 72(3), pages 704-719, January.
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