Networks in labor markets: Wage and employment dynamics and inequality

Antoni Calvó-Armengol; Matthew O. Jackson

doi:https://doi.org/10.1016/j.jet.2005.07.007

Networks in labor markets: Wage and employment dynamics and inequality

Antoni Calvó-Armengol, Matthew O. Jackson

Department of Economics and Economic History

Research output: Contribution to journal › Article › Research › peer-review

133 Citations (Scopus)

Abstract

We present a model of labor markets that accounts for the social network through which agents hear about jobs. We show that both wages and employment are positively associated (a strong form of correlation) across time and agents. We also analyze the decisions of agents regarding staying in the labor market or dropping out. If there are costs to staying in the labor market, then networks of agents that start with a worse wage status will have higher drop-out rates and there will be a persistent differences in wages between groups according to the starting states of their networks. © 2005 Elsevier Inc. All rights reserved.

Original language	English
Pages (from-to)	27-46
Journal	Journal of Economic Theory
Volume	132
DOIs	https://doi.org/10.1016/j.jet.2005.07.007
Publication status	Published - 1 Jan 2007

Keywords

Drop-out rates
Employment
Labor markets
Networks
Unemployment
Wage inequality
Wages

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

https://doi.org/10.1016/j.jet.2005.07.007

Cite this

@article{e9922447bd5646b99b62f06fb0725266,

title = "Networks in labor markets: Wage and employment dynamics and inequality",

abstract = "We present a model of labor markets that accounts for the social network through which agents hear about jobs. We show that both wages and employment are positively associated (a strong form of correlation) across time and agents. We also analyze the decisions of agents regarding staying in the labor market or dropping out. If there are costs to staying in the labor market, then networks of agents that start with a worse wage status will have higher drop-out rates and there will be a persistent differences in wages between groups according to the starting states of their networks. {\textcopyright} 2005 Elsevier Inc. All rights reserved.",

keywords = "Drop-out rates, Employment, Labor markets, Networks, Unemployment, Wage inequality, Wages",

author = "Antoni Calv{\'o}-Armengol and Jackson, {Matthew O.}",

year = "2007",

month = jan,

day = "1",

doi = "https://doi.org/10.1016/j.jet.2005.07.007",

language = "English",

volume = "132",

pages = "27--46",

journal = "Journal of Economic Theory",

issn = "0022-0531",

publisher = "Academic Press Inc.",

}

TY - JOUR

T1 - Networks in labor markets: Wage and employment dynamics and inequality

AU - Calvó-Armengol, Antoni

AU - Jackson, Matthew O.

PY - 2007/1/1

Y1 - 2007/1/1

N2 - We present a model of labor markets that accounts for the social network through which agents hear about jobs. We show that both wages and employment are positively associated (a strong form of correlation) across time and agents. We also analyze the decisions of agents regarding staying in the labor market or dropping out. If there are costs to staying in the labor market, then networks of agents that start with a worse wage status will have higher drop-out rates and there will be a persistent differences in wages between groups according to the starting states of their networks. © 2005 Elsevier Inc. All rights reserved.

AB - We present a model of labor markets that accounts for the social network through which agents hear about jobs. We show that both wages and employment are positively associated (a strong form of correlation) across time and agents. We also analyze the decisions of agents regarding staying in the labor market or dropping out. If there are costs to staying in the labor market, then networks of agents that start with a worse wage status will have higher drop-out rates and there will be a persistent differences in wages between groups according to the starting states of their networks. © 2005 Elsevier Inc. All rights reserved.

KW - Drop-out rates

KW - Employment

KW - Labor markets

KW - Networks

KW - Unemployment

KW - Wage inequality

KW - Wages

U2 - https://doi.org/10.1016/j.jet.2005.07.007

DO - https://doi.org/10.1016/j.jet.2005.07.007

M3 - Article

VL - 132

SP - 27

EP - 46

JO - Journal of Economic Theory

JF - Journal of Economic Theory

SN - 0022-0531

ER -

Networks in labor markets: Wage and employment dynamics and inequality

Abstract

Keywords

UN SDGs

Access to Document

Fingerprint

Cite this