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Wage Dynamics and Peer Referrals

Author

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  • Vincent Boucher

    (Universite Laval)

  • Marion Gousse

    (Universite Laval)

Abstract

We present a flexible model of wage dynamics where information about job openings is transmitted through social networks. We show that the individuals' wages dynamic is positively associated across time and that this result holds outside the stationary distribution, and under observed and unobserved heterogeneity. We present an empirical application using the British Household Panel Survey by exploiting direct information about individual's social networks. We find that having more employed friends leads to more job offers, but to slightly lower offered wages. We also find that non-relative friends are more helpful than relatives, and that individuals benefit relatively more from their male friends. (Copyright: Elsevier)

Suggested Citation

  • Vincent Boucher & Marion Gousse, 2019. "Wage Dynamics and Peer Referrals," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 31, pages 1-23, January.
  • Handle: RePEc:red:issued:18-6
    DOI: 10.1016/j.red.2018.12.001
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    More about this item

    Keywords

    Labour market; peer referals; social networks;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market

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