The study develops a simple model where workers can obtain a job through either their strong or weak ties. It shows that increasing the time spent with weak ties raises the employment rate of ...workers. It also shows that when the job-destruction rate or the job-information rate increases, workers choose to rely more on their weak ties to find a job. The model is extended so unemployed workers can also learn of a vacancy directly from an employer. Results show that equilibrium employment and time spent with weak ties are sometimes, but not in all cases, positively related.
This book studies the links between urban economics and labor economics. Different models of urban labor economic theory are examined in the initial two parts of this book: first urban ...search-matching models and then urban efficiency wages. These models are then used to analyze urban ghettos and their consequences for ethnic minorities in the labor market. Professor Zenou first provides different mechanisms for the so-called spatial mismatch hypothesis, which postulates that housing discrimination introduces a key frictional factor that prevents minorities from improving access to job opportunities by relocating their residences closer to jobs. He then explores social networks, which tend to be affected by spatial factors, as workers who are physically close to jobs can be socially far away from them. Based on these models, the author offers different policies aiming at fighting high unemployment rates experienced by ethnic minorities residing in segregated areas.
Mothers, Peers, and Gender-Role Identity Olivetti, Claudia; Patacchini, Eleonora; Zenou, Yves
Journal of the European Economic Association,
02/2020, Letnik:
18, Številka:
1
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Abstract
We study whether a woman’s labor supply as a young adult is shaped by the work behavior of her adolescent peers’ mothers. Using detailed information on a sample of U.S. teenagers who are ...followed over time, we find that labor force participation of high school peers’ mothers affects adult women’s labor force participation, above and beyond the effect of their own mothers. The analysis suggests that women who were exposed to a larger number of working mothers during adolescence are less likely to feel that work interferes with family responsibilities. This perception, in turn, is important for whether they work when they have children.
We survey the literature on the economic consequences of the structure of social networks. We develop a taxonomy of "macro" and "micro" characteristics of social-interaction networks and discuss both ...the theoretical and empirical findings concerning the role of those characteristics in determining learning, diffusion, decisions, and resulting behaviors. We also discuss the challenges of accounting for the endogeneity of networks in assessing the relationship between the patterns of interactions and behaviors.
A labor market model is developed in which the formal sector is characterized by search frictions whereas the informal sector is competitive. We show that there exists a unique steady-state ...equilibrium in this dual economy. We then consider different policies financed by a tax on firms' profits. We find that reducing the unemployment benefit or the firms' entry cost in the formal sector induces higher job creation and formal employment, reduces the size of the informal sector but has an ambiguous effect on wages. We also find that an employment/wage subsidy policy and a hiring subsidy policy have different implications. In particular, the former increases the size of the informal sector while the latter decreases it.
We develop a model where the unemployed workers in the city can find a job either directly or through weak or strong ties. We show that, in denser areas, individuals choose to interact with more ...people and meet more random encounters (weak ties) than in sparsely populated areas. We also demonstrate that, for a low urbanization level, there is a unique steady-state equilibrium where workers do not interact with weak ties, while, for a high level of urbanization, there is a unique steady-state equilibrium with full social interactions. We show that these equilibria are usually not socially efficient when the urban population has an intermediate size because there are too few social interactions compared to the social optimum. Finally, even when social interactions are optimal, we show that there is over-urbanization in equilibrium.
We develop a model where, in the first stage, minority individuals have to decide whether or not they want to assimilate to the majority culture while, in the second stage, all individuals (both from ...the majority and the minority group) embedded in a network have to decide how much effort they exert in some activity (say education). We show that the more central minority agents are located in the social network, the more they assimilate to the majority culture. We also show that denser networks tend to favor assimilation so that, for example, it is easier to assimilate in a complete network than in a star-shaped network. We show that the subgame-perfect equilibrium is not optimal because there is not enough activity and assimilation. We then endogeneize the network and show under which condition the ethnic minorities either assimilate to or separated themselves from the majority group.
Peer effects and social networks in education Calvó-Armengol, Antoni; Patacchini, Eleonora; Zenou, Yves
Review of economic studies/The review of economic studies,
10/2009, Letnik:
76, Številka:
4
Journal Article
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We develop a model that shows that, at the Nash equilibrium, the outcome of each individual embedded in a network is proportional to his/her Katz-Bonacich centrality measure. This measure takes into ...account both direct and indirect friends of each individual, but puts less weight to his/her distant friends. We then bring the model to the data using a very detailed dataset of adolescent friendship networks. We show that, after controlling for observable individual characteristics and unobservable network specific factors, a standard deviation increase in the Katz-Bonacich centrality increases the pupil school performance by more than 7% of one standard deviation.
We analyze a model of R&D alliance networks where firms are engaged in R&D collaborations that lower their production costs while competing on the product market. We provide a complete ...characterization of the Nash equilibrium and determine the optimal R&D subsidy program that maximizes total welfare. We then structurally estimate this model using a unique panel of R&D collaborations and annual company reports. We use our estimates to study the impact of targeted versus nondiscriminatory R&D subsidy policies and empirically rank firms according to the welfare-maximizing subsidies they should receive.
We develop a search-matching model with rural–urban migration and an explicit land market. Wages, job creation, urban housing prices are endogenous and we characterize the steady-state equilibrium. ...We then consider three different policies: a transportation policy that improves the public transport system in the city, an entry-cost policy that encourages investment in the city and a restricting-migration policy that imposes some costs on migrants. We show that all these policies can increase urban employment but the transportation policy has much more drastic effects. This is because a decrease in commuting costs has both a direct positive effect on land rents, which discourages migrants to move to the city, and a direct negative effect on urban wages, which reduces job creation and thus migration. When these two effects are combined with search frictions, the interactions between the land and the labor markets have amplifying positive effects on urban employment. Thus, improving the transport infrastructure in cities can increase urban employment despite the induced migration from rural areas.
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