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Social network, unemployment and sector trap

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  • Manon Domingues dos Santos

    (UGE UFR SHS - Université Gustave Eiffel - UFR Sciences humaines et sociales - Université Gustave Eiffel, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - Université Gustave Eiffel)

  • Emmanuelle Taugourdeau

    (ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay)

Abstract

This paper shows that social networks are likely to induce sector concentration and sector trapping in the labor market. We develop a two-sector economy with endogenous allocation of the labor force between sectors and social networks that favor the transmission of job information. We show that social networks can induce sector concentration even when sectoral productivities and entry costs are perfectly symmetric. Moreover, we show that social networks can also trap workers in poorly productive sectors. These results are in accordance with the migration history and the situation of Portuguese immigrants in the French labor market.
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  • Manon Domingues dos Santos & Emmanuelle Taugourdeau, 2021. "Social network, unemployment and sector trap," Post-Print hal-03420666, HAL.
    • Handle: RePEc:hal:journl:hal-03420666
    DOI: 10.1016/j.mathsocsci.2021.03.014
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    as
    1. Calvo-Armengol, Antoni & Zenou, Yves, 2005. "Job matching, social network and word-of-mouth communication," Journal of Urban Economics, Elsevier, vol. 57(3), pages 500-522, May.
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