The Effects of Social Networks on Employment and Inequality
We develop a model where agents obtain information about job opportunities through an explicitly modeled network of social contacts. We show that employment is positively correlated across time and agents. Moreover, unemployment exhibits duration dependence: the probability of obtaining a job decreases in the length of time that an agent has been unemployed. Finally, we examine inequality between two groups. If staying in the labor market is costly and one group starts with a worse employment status, then that group's drop-out rate will be higher and their employment prospects will be persistently below that of the other group.
(This abstract was borrowed from another version of this item.)
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Card & Alan B. Krueger, 1991.
"School Quality and Black-White Relative Earnings: A Direct Assessment,"
NBER Working Papers
3713, National Bureau of Economic Research, Inc.
- 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..
- 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.
- Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
- Troy Tassier, 2006. "Labor Market Implications of Weak Ties," Southern Economic Journal, Southern Economic Association, vol. 72(3), pages 704-719, January.
- Blanchard, O.J. & Diamond, P., 1990.
"Ranking, Unemployment Duration, And Wages,"
546, Massachusetts Institute of Technology (MIT), Department of Economics.
- Durlauf, Steven N, 1996.
" A Theory of Persistent Income Inequality,"
Journal of Economic Growth,
Springer, vol. 1(1), pages 75-93, March.
- Manishi Prasad & Peter Wahlqvist & Rich Shikiar & Ya-Chen Tina Shih, 2004. "A," PharmacoEconomics, Springer Healthcare | Adis, vol. 22(4), pages 225-244.
- Heckman, James J & Borjas, George J, 1980. "Does Unemployment Cause Future Unemployment? Definitions, Questions and Answers from a Continuous Time Model of Heterogeneity and State Dependence," Economica, London School of Economics and Political Science, vol. 47(187), pages 247-83, August.
- Topa, Giorgio, 2001.
"Social Interactions, Local Spillovers and Unemployment,"
Review of Economic Studies,
Wiley Blackwell, vol. 68(2), pages 261-95, April.
- Topa, Giorgio, 1997. "Social Interactions, Local Spillovers and Unemployment," Working Papers 97-17, C.V. Starr Center for Applied Economics, New York University.
- Flinn, C. & Heckman, J., 1982.
"New methods for analyzing structural models of labor force dynamics,"
Journal of Econometrics,
Elsevier, vol. 18(1), pages 115-168, January.
- James J. Heckman & Christopher J. Flinn, 1982. "New Methods for Analyzing Structural Models of Labor Force Dynamics," NBER Working Papers 0856, National Bureau of Economic Research, Inc.
- Vishwanath, Tara, 1989. "Job Search, Stigma Effect, and Escape Rate from Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 487-502, October.
- Antoni Calvó-Armengol & Matthew O. Jackson, 2003.
"Networks in Labor Markets: Wage and Employment Dynamics and Inequality,"
55, Barcelona Graduate School of Economics.
- Calvo-Armengol, Antoni & Jackson, Matthew O., 2007. "Networks in labor markets: Wage and employment dynamics and inequality," Journal of Economic Theory, Elsevier, vol. 132(1), pages 27-46, January.
- Stuart O. Schweitzer & Ralph E. Smith, 1974. "The persistence of the discouraged worker effect," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 27(2), pages 249-260, January.
- repec:tpr:qjecon:v:107:y:1992:i:4:p:1371-91 is not listed on IDEAS
- Wright, Randall, 1986. "Job Search and Cyclical Unemployment," Journal of Political Economy, University of Chicago Press, vol. 94(1), pages 38-55, February.
- Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June.
- Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-93, May.
- 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.
- Scott A. Boorman, 1975. "A Combinatorial Optimization Model for Transmission of Job Information through Contact Networks," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 216-249, Spring.
- Lynch, Lisa M, 1989. "The Youth Labor Market in the Eighties: Determinants of Re-employment Probabilities for Young Men and Women," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 37-45, February.
- George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
- Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
- 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.).
When requesting a correction, please mention this item's handle: RePEc:cla:uclatw:658612000000000032. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David K. Levine)
If references are entirely missing, you can add them using this form.