Wage dynamics and peer referrals

Publication type

Journal Article

Authors

Publication date

January 15, 2019

Summary:

We present a flexible model of wage dynamics where information about job openings is transmitted through social networks. We show that the individuals' wages dynamic is positively associated across time and that this result holds outside the stationary distribution, and under observed and unobserved heterogeneity. We present an empirical application using the British Household Panel Survey by exploiting direct information about individual's social networks. We find that having more employed friends leads to more job offers, but to slightly lower offered wages. We also find that non-relative friends are more helpful than relatives, and that individuals benefit relatively more from their male friends.

Published in

Review of Economic Dynamics

Volume and page numbers

Volume: 31 , p.1 -23

DOI

https://doi.org/10.1016/j.red.2018.12.001

ISSN

10942025

Subjects

#525433

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