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Local social capital and geographical mobility

Author

Listed:
  • Quentin David

    (CREA, University of Luxembourg)

  • Alexandre Janiak
  • Etienne Wasmer

Abstract

In this paper, we attempt to understand the determinants of mobility through introducing the concept of local social capital. Investing in local ties is rational when workers do not expect to move to another region, and reciprocally, once local social capital is accumulated, incentives to move are reduced. We build a model to illustrate several types of complementarities: observationally close individuals may take di¤erent paths characterized by high local social capital and low mobility vs. low social capital and high propensity to move. Employment protection reinforces the accumulation of local social capital and thus reduces mobility. Externalities generate multiple equilibria in which mobility and social capital are negatively correlated across equilibria. European data supports the theory: the South of Europe is characterized by both low mobility and local social capital, while the North of Europe has higher mobility and a more general type of social capital. Within a country and at the individual level, more social capital is associated with lower mobility.

Suggested Citation

  • Quentin David & Alexandre Janiak & Etienne Wasmer, 2009. "Local social capital and geographical mobility," DEM Discussion Paper Series 09-11, Department of Economics at the University of Luxembourg.
  • Handle: RePEc:luc:wpaper:09-11
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    European unemployment; Geographical mobility; Social capital;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General

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