Social Networks in Determining Employment: Patterns, Dynamics, and Inequality
نویسندگان
چکیده
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 persistence in the sense of 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 (in opportunity costs, education costs, or skills maintenance) 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.
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