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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. bertola, G. & Rogerson, R., 1996. "Institutions and Labor Reallocation," Papers 272, Banca Italia - Servizio di Studi.
  2. Alexandre Janiak & Quentin David & Etienne Wasmer, 2008. "Local Social Capital and Geographical Mobility: Some Empirics and a Conjecture on the Nature of European Unemployment," Sciences Po publications 3669, Sciences Po.
  3. Wasmer, Etienne, 2002. "Interpreting Europe and US Labor Markets Differences: The Specificity of Human Capital Investments," IZA Discussion Papers 549, Institute for the Study of Labor (IZA).
  4. Paul Winters & Alain de Janvry & Elisabeth Sadoulet, 2001. "Family and Community Networks in Mexico-U.S. Migration," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 159-184.
  5. Yann Algan & Pierre Cahuc, 2005. "The Roots of Low European Employment: Family Culture?," NBER Chapters, in: NBER International Seminar on Macroeconomics 2005, pages 65-109 National Bureau of Economic Research, Inc.
  6. John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 2005. "A Positive Theory Of Geographic Mobility And Social Insurance," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 263-303, 02.
  7. Lars Ljungqvist & Thomas J. Sargent, 1996. "The European Unemployment Dilemma," EUI-RSCAS Working Papers 36, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
  8. Javier Suarez & Samuel Bentolila & Claudio Michelacci, 2004. "Social Contacts and Occupational Choice," 2004 Meeting Papers 593, Society for Economic Dynamics.
  9. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
  10. 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.
  11. 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.
  12. 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.
  13. Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier.
  14. Samuel Bowles & Herbert Gintis, 2001. "Social Capital and Community Governance," Working Papers 01-01-003, Santa Fe Institute.
  15. Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1056-1093, December.
  16. Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
  17. Antonio Spilimbergo & Luis Ubeda, 2002. "Family Attachment and the Decision to Move by Race," IMF Working Papers 02/83, International Monetary Fund.
  18. Pierre Cahuc & Fran�Ois Fontaine, 2009. "On the Efficiency of Job Search with Social Networks," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(3), pages 411-439, 06.
  19. Luis Ubeda & Antonio Spilimbergo, 2002. "A Model of Multiple Equilibria in Geographic Labor Mobility," IMF Working Papers 02/31, International Monetary Fund.
  20. Belot, Michèle & Ermisch, John, 2006. "Friendship ties and geographical mobility: evidence from the BHPS," ISER Working Paper Series 2006-33, Institute for Social and Economic Research.
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  22. De Martí, Joan & Zenou, Yves, 2009. "Social Networks," CEPR Discussion Papers 7599, C.E.P.R. Discussion Papers.
  23. Krishna B. Kumar & John G. Matsusaka, 2004. "Village versus Market Social Capital: An Approach to Development," Development and Comp Systems 0408003, EconWPA.
  24. Matt Jackson, 2003. "The Effects of Social Networks on Employment and Inequality," Theory workshop papers 658612000000000032, UCLA Department of Economics.
  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.
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