Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
957512 | Journal of Economic Theory | 2007 | 20 Pages |
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.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Antoni Calvó-Armengol, Matthew O. Jackson,