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A Social Network Analysis of Occupational Segregation

Author

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  • Marco J. van der Leij

    (University of Alicante)

  • I. Sebastian Buhai

    (University of Alicante)

Abstract

We develop a social network model of occupational segregation between different social groups, generated by the existence of positive inbreeding bias among individuals from the same group. If network referrals are important for job search, then expected homophily in the contact network structure induces different career choices for individuals from different social groups. This further translates into stable occupational segregation equilibria in the labor market. We derive the conditions for wage and unemployment inequality in the segregation equilibria and characterize first and second best social welfare optima. Surprisingly, we find that socially optimal policies involve segregation.

Suggested Citation

  • Marco J. van der Leij & I. Sebastian Buhai, 2008. "A Social Network Analysis of Occupational Segregation," Working Papers 2008.31, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2008.31
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    1. Balázs Lengyel & Rikard H. Eriksson, 2015. "Co-worker networks and productivity growth in regions," Papers in Evolutionary Economic Geography (PEEG) 1513, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2015.
    2. Sergio Currarini & Fernando Vega Redondo, 2010. "Search and Homophily in Social Networks," Working Papers 2010_24, Department of Economics, University of Venice "Ca' Foscari".
    3. Balázs Lengyel & Rikard H. Eriksson, 2017. "Co-worker networks, labour mobility and productivity growth in regions," Journal of Economic Geography, Oxford University Press, vol. 17(3), pages 635-660.
    4. Zenou, Yves & De Martí, Joan, 2009. "Ethnic Identity and Social Distance in Friendship Formation," CEPR Discussion Papers 7566, C.E.P.R. Discussion Papers.
    5. Andre Hofmeyr, 2010. "Social Networks And Ethnic Niches: An Econometric Analysis Of The Manufacturing Sector In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 78(1), pages 107-130, March.
    6. Tiago V. V. Cavalcanti & Chryssi Giannitsarou, 2017. "Growth and Human Capital: A Network Approach," Economic Journal, Royal Economic Society, vol. 127(603), pages 1279-1317, August.
    7. Kahanec, Martin, 2007. "Ethnic Competition and Specialization," IZA Discussion Papers 3167, Institute of Labor Economics (IZA).
    8. Pintea Mihaela, 2020. "Dynamics of female labor force participation and welfare with multiple social reference groups," The B.E. Journal of Macroeconomics, De Gruyter, vol. 20(1), pages 1-23, January.
    9. Toomet, Ott & Van Der Leij, Marco & Rolfe, Meredith, 2013. "Social networks and labor market inequality between ethnicities and races," Network Science, Cambridge University Press, vol. 1(3), pages 321-352, December.
    10. Horváth, Gergely, 2014. "Occupational mismatch and social networks," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 442-468.
    11. Pothier, David, 2012. "Referral networks and the allocation of talent," MPRA Paper 39895, University Library of Munich, Germany.
    12. David Pothier, 2018. "Occupational Segregation and the (Mis)allocation of Talent," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(1), pages 242-267, January.
    13. Nuno Crespo & Nadia Simoes & Sandrina B. Moreira, 2014. "Gender differences in occupational mobility - evidence from Portugal," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(4), pages 460-481, July.
    14. POTHIER, David, 2012. "Referral Networks and the Allocation of Talent," Economics Working Papers ECO2012/18, European University Institute.
    15. Gauer, Florian & Landwehr, Jakob, 2014. "Continuous homophily and clustering in random networks," Center for Mathematical Economics Working Papers 515, Center for Mathematical Economics, Bielefeld University.
    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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    More about this item

    Keywords

    Social Networks; Homophily; Inbreeding Bias; Occupational Segregation; Labor Market Inequality; Social Welfare;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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