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Local Social Capital and Geographical Mobility: A Theory

  • David, Quentin

    ()

    (ECARES, Free University of Brussels)

  • Janiak, Alexandre

    ()

    (University of Chile)

  • Wasmer, Etienne

    ()

    (Sciences Po, Paris)

In this paper, we attempt to understand the determinants of mobility by introducing the concept of local social capital. Investing in local ties is rational when workers anticipate that they will not move to another region. Reciprocally, once local social capital is accumulated, incentives to move are reduced. Our model illustrates several types of complementarity leading to multiple equilibria (a world of local social capital and low mobility vs. a world of low social capital and high propensity to move). It also shows that local social capital is systematically negative for mobility, and can be negative for employment, but some other types of social capital can actually raise employment.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3668.

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Length: 40 pages
Date of creation: Aug 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3668
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  1. Spilimbergo, Antonio & Ubeda, Luis, 2004. "A model of multiple equilibria in geographic labor mobility," Journal of Development Economics, Elsevier, vol. 73(1), pages 107-123, February.
  2. Ljungqvist, Lars & Sargent, Thomas J., 1997. "The European Unemployment Dilemma," Working Paper Series 481, Research Institute of Industrial Economics.
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  4. Cahuc, Pierre & Fontaine, Francois, 2002. "On the Efficiency of Job Search with Social Networks," IZA Discussion Papers 583, Institute for the Study of Labor (IZA).
  5. David, Quentin & Janiak, Alexandre & Wasmer, Etienne, 2008. "Local Social Capital and Geographical Mobility: Some Empirics and a Conjecture on the Nature of European Unemployment," IZA Discussion Papers 3669, Institute for the Study of Labor (IZA).
  6. Giuseppe Bertola & Andrea Ichino, 1995. "Wage Inequality and Unemployment: United States versus Europe," NBER Chapters, in: NBER Macroeconomics Annual 1995, Volume 10, pages 13-66 National Bureau of Economic Research, Inc.
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  9. Algan, Yann & Cahuc, Pierre, 2005. "The Roots of Low European Employment: Family Culture?," IZA Discussion Papers 1683, Institute for the Study of Labor (IZA).
  10. Matt Jackson, 2003. "The Effects of Social Networks on Employment and Inequality," Theory workshop papers 658612000000000032, UCLA Department of Economics.
  11. Etienne Wasmer, 2006. "Interpreting Europe and US labor markets differences : the specificity of human capital investments," Sciences Po publications info:hdl:2441/8904, Sciences Po.
  12. bertola, G. & Rogerson, R., 1996. "Institutions and Labor Reallocation," Papers 272, Banca Italia - Servizio di Studi.
  13. Calvó-Armengol, Antoni & Verdier, Thierry & Zenou, Yves, 2006. "Strong and Weak Ties in Employment and Crime," CEPR Discussion Papers 5448, C.E.P.R. Discussion Papers.
  14. John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 2001. "A positive theory of geographic mobility and social insurance," Economics Working Papers 604, Department of Economics and Business, Universitat Pompeu Fabra.
  15. Winters, Paul C. & de Janvry, Alain & Sadoulet, Elisabeth, 1999. "Family And Community Networks In Mexico-U.S. Migration," Working Papers 12907, University of New England, School of Economics.
  16. Javier Suarez & Samuel Bentolila & Claudio Michelacci, 2004. "Social Contacts and Occupational Choice," 2004 Meeting Papers 593, Society for Economic Dynamics.
  17. Samuel Bowles & Herbert Gintis, 2002. "Social Capital and Community Governance," Economic Journal, Royal Economic Society, vol. 112(483), pages 419-436, November.
  18. Richard Layard & Stephen Nickell, 1998. "Labour Market Institutions and Economic Performance," CEP Discussion Papers dp0407, Centre for Economic Performance, LSE.
  19. Glenn C. Loury, 1976. "A Dynamic Theory of Racial Income Differences," Discussion Papers 225, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  20. Krishna B. Kumar & John G. Matsusaka, 2004. "Village versus Market Social Capital: An Approach to Development," Development and Comp Systems 0408003, EconWPA.
  21. Yannis M. Ioannides & Linda Datcher Loury, 2002. "Job Information Networks, Neighborhood Effects and Inequality," Discussion Papers Series, Department of Economics, Tufts University 0217, Department of Economics, Tufts University.
  22. Belot, Michèle & Ermisch, John, 2006. "Friendship Ties and Geographical Mobility: Evidence from the BHPS," IZA Discussion Papers 2209, Institute for the Study of Labor (IZA).
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  24. Spilimbergo, Antonio & Ubeda, Luis, 2004. "Family attachment and the decision to move by race," Journal of Urban Economics, Elsevier, vol. 55(3), pages 478-497, May.
  25. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-18, December.
  26. Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
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