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Job Contact Networks, Inequality and Aggregate Output

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  • Andrea Mario Lavezzi
  • Nicola Meccheri

Abstract

In this paper we study the effects of social networks on wage inequality and aggregate production. In particular, we consider a simplified version of the model by Calvo'-Armengol and Jackson (2003), with good and bad jobs and skilled and unskilled workers. Our findings are: i) increasing the number of social links increases aggregate output and may reduce inequality; ii) given a number of social connections, output increases if the average distance among worker decreases; iii) a more mixed and well-integrated society, that is a society in which heterogeneous workers share social links, produces more output and less inequality than a society in which some workers are isolated, when productivity of the most productive agents in the best jobs is sufficiently low. We draw some policy implications from these results.

Suggested Citation

  • Andrea Mario Lavezzi & Nicola Meccheri, 2004. "Job Contact Networks, Inequality and Aggregate Output," Discussion Papers 2004/42, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  • Handle: RePEc:pie:dsedps:2004/42
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    Cited by:

    1. Marco Guerrazzi, 2005. "Notes on Continuous Dynamic Models: the Benhabib-Farmer Condition for Indeterminacy," Discussion Papers 2005/54, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    2. Lorenzo Corsini & Pier Mario Pacini & Luca Spataro, 2010. "Workers' Choice on Pension Schemes: an Assessment of the Italian TFR Reform Through Theory and Simulations," Discussion Papers 2010/96, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    3. Maurizio Lisciandra, 2007. "The Role of Reciprocating Behaviour in Contract Choice," Discussion Papers 2007/65, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

    More about this item

    Keywords

    Social Networks; Wage Inequality; Aggregate Output;

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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