Transitions Out of Unemployment: the Role of Social Networks' Topology and Firms' recruitment Strategies
In this paper we adopt the probabilistic framework of Calv´o-Armengol and Jackson (2004) to study the effects of job contact networks on outof- unemployment transitions. In particular we evaluate the role of di erent network topologies vis-a-vis state-dependent probabilities of receiving information on vacancies, which we relate to different firms’recruitment strategies. We find that social connections produce sizable increases in upward mobility from unemployment and, in general,symmetric network topologies perform better than asymmetric ones. In addition, and most interestingly, these results strongly depends on the di erent hypotheses on the firms’ hiring process strategy. Furthermore, in scale-free networks the probability of transitions out of unemployment increases in the exponent of the power-law degree distribution, but its value is much lower than what obtainable in Poisson random networks.
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