Social Interactions and Labor Market Outcomes in Cities

Yves Zenou

No 3283, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 condition, 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: land rent; social networks; labor market; weak ties (search for similar items in EconPapers)
JEL-codes: D85 J60 R14 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2008-01
New Economics Papers: this item is included in nep-geo, nep-lab, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - revised version published as 'A Dynamic Model of Weak and Strong Ties in the Labor Market' in: Journal of Labor Economics, 2015, 33 (4), 891-932

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