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Social Interactions and Labor Market Outcomes in Cities

Yves Zenou

No 755, Working Paper Series from Research Institute of Industrial Economics

Abstract: We develop a model where information about jobs is essentially obtained through friends and relatives, i.e. strong and weak ties. Workers commute to a business center to work and to interact with other people. We find that housing prices increase with the level of social interactions in the city because information about jobs is transmitted more rapidly and, as a result, individuals are more likely to be employed and to be able to pay higher land rents. We also show that, under some conditions, workers using more their weak ties than strong ties to find a job receive a higher wage. We finally demonstrate that workers living far away from jobs pay lower housing prices but experience higher unemployment rates than those living close to jobs because they mainly rely on their strong ties to obtain information about jobs.

Keywords: Weak Ties; Labor Market; Social Networks; Land Rent (search for similar items in EconPapers)
JEL-codes: A14 J60 R14 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2008-06-19
New Economics Papers: this item is included in nep-geo, nep-lab, nep-soc and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Social Interactions and Labor Market Outcomes in Cities (2008) Downloads
Working Paper: Social Interactions and Labour Market Outcomes in Cities (2007) Downloads
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