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Local Social Capital and Geographical Mobility: Some Empirics and a Conjecture on the Nature of European Unemployment

Listed author(s):
  • Alexandre Janiak

    (Departamento de Ingenieria Industrial (DII))

  • Quentin David

    (Département de Droit de l'UL)

  • Etienne Wasmer

    (Département d'économie)

European labor markets are characterized by the low geographical mobility of workers. The absence of mobility is a factor behind high unemployment when jobless people prefer to remain in their home region rather than to go prospecting in more dynamic areas. In this paper, we attempt to understand the determinants of mobility by introducing the concept of local social capital. Using data from a European household panel (ECHP), we provide various measures of social capital, which appears to be a strong factor of immobility. It is also a fairly large factor of unemployment when social capital is clearly local, while other types of social capital are found to have a positive effect on employability. We also find evidence of the reciprocal causality, that is, individuals born in another region have accumulated less local social capital. Finally, observing that individuals in the South of Europe appear to accumulate more local social capital, while in Northern Europe they tend to invest in more general types of social capital, we argue that part of the European unemployment puzzle can be better understood thanks to the concept of local social capital.

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File URL: http://spire.sciencespo.fr/hdl:/2441/10058/resources/dp3669.pdf
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Paper provided by Sciences Po in its series Sciences Po publications with number 3669.

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Date of creation: Aug 2008
Handle: RePEc:spo:wpmain:info:hdl:2441/10058
Contact details of provider: Web page: http://www.sciencespo.fr/

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  1. Nickell, S. & Layard, R., 1997. "Labour Market Institutions and Economic Performance," Papers 23, Centre for Economic Performance & Institute of Economics.
  2. Calvo-Armengol, Antoni & Zenou, Yves, 2005. "Job matching, social network and word-of-mouth communication," Journal of Urban Economics, Elsevier, vol. 57(3), pages 500-522, May.
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  5. Algan, Yann & Cahuc, Pierre, 2005. "The Roots of Low European Employment : Family Culture ?," CEPREMAP Working Papers (Docweb) 0512, CEPREMAP.
  6. Quentin David & Alexandre Janiak & Etienne Wasmer, 2010. "Local social capital and geographical mobility," Post-Print hal-01024088, HAL.
  7. de Marti, Joan & Zenou, Yves, 2009. "Social Networks," Working Paper Series 816, Research Institute of Industrial Economics.
  8. Kamhon Kan, 2006. "Residential Mobility and Social Capital," IEAS Working Paper : academic research 06-A005, Institute of Economics, Academia Sinica, Taipei, Taiwan.
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  11. Belot, Michèle & Ermisch, John, 2006. "Friendship ties and geographical mobility: evidence from the BHPS," ISER Working Paper Series 2006-33, Institute for Social and Economic Research.
  12. Luis Ubeda & Antonio Spilimbergo, 2002. "A Model of Multiple Equilibria in Geographic Labor Mobility," IMF Working Papers 02/31, .
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  14. Giuseppe Bertola & Andrea Ichino, 1995. "Wage Inequality and Unemployment: United States versus Europe," NBER Chapters, in: NBER Macroeconomics Annual 1995, Volume 10, pages 13-66 National Bureau of Economic Research, Inc.
  15. David, Quentin & Janiak, Alexandre & Wasmer, Etienne, 2008. "Local Social Capital and Geographical Mobility: A Theory," IZA Discussion Papers 3668, Institute for the Study of Labor (IZA).
  16. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-1418, December.
  17. Antonio Spilimbergo & Luis Ubeda, 2002. "Family Attachment and the Decision to Move by Race," IMF Working Papers 02/83, .
  18. 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.
  19. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
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