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Journal Article

Endogenous job contact networks

Authors

Publication date

Nov 2014

Summary

We develop a model where workers, anticipating the risk of becoming unemployed, invest in connections in order to access information about available jobs that other workers may have. The investment in connections is high when the job separation rate in the labor market is moderate, whereas it is low for either low or high levels of job separation rate. The equilibrium response of network investment to changes in the labor market conditions generates novel empirical predictions. In particular, the probability that a worker finds a new job via his connections increases in the separation rate when the separation rate is low, whereas it decreases when the separation rate is high. These predictions are supported by the empirical patterns that we document for the U.K. labor market.

Published in

International Economic Review

Volume and page numbers

55 , 1201 -1226

DOI

http://dx.doi.org/10.1111/iere.12087

ISSN

16

Subjects

Social Networks and Unemployment

Links

http://serlib0.essex.ac.uk/record=b1599247~S5

Notes

Not held in Research Library - bibliographic reference only


Related publications

  1. Endogenous job contact networks

    Andrea Galeotti and Luca Paolo Merlino

    1. Social Networks
    2. Unemployment

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