We study a directed search equilibrium with risk-averse workers who can on the job and accumulate non-contingent assets under borrowing limit. Search outcomes affect earnings wealth accumulation. In turn, decisions by changing optimal trade-off between wage matching probability. The interaction provides important self-insurance. calibrated model yields significant inequality as measured mean-mi...

We contrast Granovetter’s hypothesis (Granovetter, M. (1973). American Journal of Sociology, 78, 1360–1380; Granovetter, M. (1974). Getting a Job: A Study of Contacts and Careers. University of Chicago Press; Granovetter, M. (1995). Getting a Job: A Study of Contacts and Careers. University of Chicago Press) that social networks help individuals to find better-paid jobs with a new model, which ...