IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

How Urbanization Affect Employment and Social Interactions

Listed author(s):
  • Yasuhiro Sato

    ()

    (Graduate School of Economics, Osaka University)

  • Yves Zenou

    ()

    (Research Institute of Industrial Economics (IFN), Stockholm University)

We develop a model where 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.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1332.pdf
Download Restriction: no

Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 13-32.

as
in new window

Length: 43 pages
Date of creation: Dec 2013
Handle: RePEc:osk:wpaper:1332
Contact details of provider: Web page: http://www2.econ.osaka-u.ac.jp/library/global/e_HP/e_g_shiryo.html
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Sebastian Grauwin & Florence Goffette-Nagot & Pablo Jensen, 2012. "Dynamic models of residential segregation: An analytical solution," Post-Print hal-00650292, HAL.
  2. Marshall, Alfred, 1890. "The Principles of Economics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number marshall1890.
  3. Brueckner, Jan & Thisse, Jacques-François & Zenou, Yves, 2000. "Local Labour Markets, Job Matching and Urban Location," CEPR Discussion Papers 2612, C.E.P.R. Discussion Papers.
  4. Wahba, Jackline & Zenou, Yves, 2004. "Density, Social Networks and Job Search Methods: Theory and Application to Egypt," Working Paper Series 629, Research Institute of Industrial Economics.
  5. Edward E. Glaeser & Bruce Sacerdote & Jose A. Scheinkman, 1995. "Crime and Social Interactions," Harvard Institute of Economic Research Working Papers 1738, Harvard - Institute of Economic Research.
  6. MOSSAY, Pascal & PICARD, Pierre M., 2013. "Spatial segregation and urban structure," CORE Discussion Papers 2013019, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. MOSSAY, Pascal & PICARD, Pierre M., 2009. "On spatial equilibria in a social interaction model," CORE Discussion Papers 2009063, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Antoni Calvó-Armengol & Eleonora Patacchini & Yves Zenou, 2009. "Peer Effects and Social Networks in Education," Review of Economic Studies, Oxford University Press, vol. 76(4), pages 1239-1267.
  9. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
  10. Antoni Calvó-Armengol & Thierry Verdier & Yves Zenouc, 2007. "Strong and Weak Ties in Employment and Crime," Post-Print halshs-00754247, HAL.
  11. Helsley, Robert & Zenou, Yves, 2011. "Social Networks and Interactions in Cities," Research Papers in Economics 2011:8, Stockholm University, Department of Economics.
  12. Giorgio Topa, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 261-295.
  13. Topa, Giorgio & Zenou, Yves, 2015. "Neighborhood and Network Effects," Handbook of Regional and Urban Economics, Elsevier.
  14. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
  15. Jan K. Brueckner & Ann G. Largey, 2006. "Social Interaction and Urban Sprawl," CESifo Working Paper Series 1843, CESifo Group Munich.
  16. Eleonora Patacchini & Yves Zenou, 2012. "Ethnic Networks and Employment Outcomes," CReAM Discussion Paper Series 1202, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  17. Bayer, Patrick & Ross, Stephen L., 2005. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working Papers 8, Yale University, Department of Economics.
  18. Zenou, Yves, 2013. "Spatial versus social mismatch," Journal of Urban Economics, Elsevier, vol. 74(C), pages 113-132.
  19. Yannis M. Ioannides, 2010. "Neighborhood Effects and Housing," Discussion Papers Series, Department of Economics, Tufts University 0747, Department of Economics, Tufts University.
  20. 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.
  21. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
  22. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
  23. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, September.
  24. Pierre-Philippe Combes & Laurent Gobillon, 2014. "The Empirics of Agglomeration Economies," PSE Working Papers halshs-01071761, HAL.
  25. Zenou, Yves, 2010. "Search, Migration, and Urban Land Use: The Case of Transportation Policies," Research Papers in Economics 2010:19, Stockholm University, Department of Economics.
  26. Judith K. Hellerstein & Melissa McInerney & David Neumark, 2008. "Neighbors And Co-Workers: The Importance Of Residential Labor Market Networks," NBER Working Papers 14201, National Bureau of Economic Research, Inc.
  27. Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," World Bank Economic Review, World Bank Group, vol. 13(2), pages 275-302, May.
  28. Yannis M. Ioannides, 2012. "From Neighborhoods to Nations: The Economics of Social Interactions," Economics Books, Princeton University Press, edition 1, number 9892.
  29. Edward L. Glaeser, 2010. "Agglomeration Economics," NBER Books, National Bureau of Economic Research, Inc, number glae08-1.
  30. Yamada, Gustavo, 1996. "Urban Informal Employment and Self-Employment in Developing Countries: Theory and Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 44(2), pages 289-314, January.
  31. Robert W. Helsley & William C. Strange, 2007. "Urban interactions and spatial structure," Journal of Economic Geography, Oxford University Press, vol. 7(2), pages 119-138, March.
  32. Antoni Calvó-Armengol & Matthew O. Jackson, 2004. "The Effects of Social Networks on Employment and Inequality," American Economic Review, American Economic Association, vol. 94(3), pages 426-454, June.
  33. repec:esx:essedp:708 is not listed on IDEAS
  34. Douglas Marcouiller, S.J. & Veronica Ruiz de Castilla & Christopher Woodruff, 1995. "Formal Measures of the Informal Sector Wage Gap in Mexico, El Salvador, and Peru," Boston College Working Papers in Economics 294., Boston College Department of Economics.
  35. R. Jason Faberman, 2005. "What’s In a City?: Understanding the Micro-Level Employer Dynamics Underlying Urban Growth," Working Papers 386, U.S. Bureau of Labor Statistics.
  36. Cattell, Vicky, 2001. "Poor people, poor places, and poor health: the mediating role of social networks and social capital," Social Science & Medicine, Elsevier, vol. 52(10), pages 1501-1516, May.
  37. Edward L. Glaeser, 2010. "Introduction to "Agglomeration Economics"," NBER Chapters, in: Agglomeration Economics, pages 1-14 National Bureau of Economic Research, Inc.
  38. Yannis M. Ioannides & Giorgio Topa, 2010. "Neighborhood Effects: Accomplishments And Looking Beyond Them," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 343-362.
  39. Zhang, Junfu, 2004. "Residential segregation in an all-integrationist world," Journal of Economic Behavior & Organization, Elsevier, vol. 54(4), pages 533-550, August.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:osk:wpaper:1332. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Atsuko SUZUKI)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.