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Job Contact Networks, Inequality and Aggregate Economic Performance

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Listed:
  • Nicola Meccheri
  • Andrea Mario Lavezzi

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 Calvò-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 reduces inequality; ii) given a number of social connections, output increases if the average distance among worker decreases; iii) a more mixed society, that is a society in which heterogeneous worker 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

  • Nicola Meccheri & Andrea Mario Lavezzi, 2004. "Job Contact Networks, Inequality and Aggregate Economic Performance," Computing in Economics and Finance 2004 164, Society for Computational Economics.
  • Handle: RePEc:sce:scecf4:164
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    Citations

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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. 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

    networks; labor markets; mismatch; inequality; aggregate production;

    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
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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