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How urbanization affect employment and social interactions

Author

Listed:
  • Yasuhiro Sato
  • Yves Zenou

    (GAINS - ARGUMANS - Atelier De Recherche En Gestion De L'université Du Mans - GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université)

Abstract

We develop a model where the unemployed workers in the city can find a job either directly or through weak or strong ties. We show that, in denser areas, individuals choose to interact with more people and meet more random encounters (weak ties) than in sparsely populated areas. We also demonstrate that, for a low urbanization level, there is a unique steady-state equilibrium where workers do not interact with weak ties, while, for a high level of urbanization, there is a unique steady-state equilibrium with full social interactions. We show that these equilibria are usually not socially efficient when the urban population has an intermediate size because there are too few social interactions compared to the social optimum. Finally, even when social interactions are optimal, we show that there is over-urbanization in equilibrium.

Suggested Citation

  • Yasuhiro Sato & Yves Zenou, 2015. "How urbanization affect employment and social interactions," Post-Print hal-04329664, HAL.
    • Handle: RePEc:hal:journl:hal-04329664
    DOI: 10.1016/j.euroecorev.2015.01.011
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    Cited by:

    1. Guanghua Han & Yida Zhai, 2024. "The association between food insecurity and social capital under the lockdowns in COVID-hit Shanghai," Urban Studies, Urban Studies Journal Limited, vol. 61(1), pages 130-147, January.

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