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Social Networks and Labor Market Inequality between Ethnicities and Races

Author

Listed:
  • Ott Toomet

    (Tartu University)

  • Marco van der Leij

    (University of Amsterdam)

  • Meredith Rolfe

    (London School of Economics)

Abstract

This discussion paper resulted in a publication in the 'Network Science' , 2014, 96(5), 936-948. This paper analyzes the relationship between unexplained racial/ethnic wage differentials on the one hand and social network segregation, as measured by inbreeding homophily, on the other hand. Our analysis is based on both U.S. and Estonian surveys, supplemented with Estonian telephone communication data. In case of Estonia we consider the regional variation in economic performance of the Russian minority, and in the U.S. case we consider the regional variation in black-white differentials. Our analysis finds a strong relationship between the size of the differential and network segregation: regions with more segregated social networks exhibit larger unexplained wage gaps.

Suggested Citation

  • Ott Toomet & Marco van der Leij & Meredith Rolfe, 2012. "Social Networks and Labor Market Inequality between Ethnicities and Races," Tinbergen Institute Discussion Papers 12-120/II, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20120120
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    References listed on IDEAS

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    1. Card, David & Rothstein, Jesse, 2007. "Racial segregation and the black-white test score gap," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2158-2184, December.
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    More about this item

    Keywords

    social networks; wage differential; homophily; segregation; race; minorities;

    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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