TY - JOUR
T1 - The effects of social networks on employment and inequality
AU - Calvó-Armengol, Antoni
AU - Jackson, Matthew O.
PY - 2004/6/1
Y1 - 2004/6/1
N2 - We develop a model where agents obtain information about job opportunities through an explicitly modeled network of social contacts. We show that employment is positively correlated across time and agents. Moreover, unemployment exhibits duration dependence: the probability of obtaining a job decreases in the length of time that an agent has been unemployed. Finally, we examine inequality between two groups. If staying in the labor market is costly and one group starts with a worse employment status, then that group's drop-out rate will be higher and their employment prospects will be persistently below that of the other group.
AB - We develop a model where agents obtain information about job opportunities through an explicitly modeled network of social contacts. We show that employment is positively correlated across time and agents. Moreover, unemployment exhibits duration dependence: the probability of obtaining a job decreases in the length of time that an agent has been unemployed. Finally, we examine inequality between two groups. If staying in the labor market is costly and one group starts with a worse employment status, then that group's drop-out rate will be higher and their employment prospects will be persistently below that of the other group.
U2 - 10.1257/0002828041464542
DO - 10.1257/0002828041464542
M3 - Review article
VL - 94
SP - 426
EP - 454
JO - American Economic Review
JF - American Economic Review
SN - 0002-8282
IS - 3
ER -
