Impacts and Distribution of Premiums from Temporal Social Networks across Generations

Yoshitaka Ogisu
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Yoshitaka Ogisu: Graduate School of Economics, Kobe University and Junir Research Fellow, Research Institute for Economics & Business Administration (RIEB), Kobe University, JAPAN

No DP2023-13, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: Social networks certainly play an important role in labor market outcomes. In particular, the structures affect inter-group inequality via referral hiring. Through the network effects, while workers surely get premiums from the group to which they belong, they may get premiums or penalties from other groups than their own. Young workers do not obtain sufficient network premiums since referrals cannot be used well due to the higher unemployment rates of their friends. As time goes by, the network structure of each generation of course changes. In other words, not only premiums from their own network group but also those from the other network groups, or the spillovers from other generations, change over time. However, these changes in intra- and inter-group network effects have been rather overlooked so far. In this paper, we compute the network premiums for each generation in a search and matching model, and clarify which generation benefits the most from time-varying networks called temporal networks. New connections are generated proportional to the number of friends of each worker over time, while the existing connections are broken at a constant rate. Under this setting, workers get premiums or penalties depending on their network structures. On average, workers receive premiums from the overall network effects although they incur penalties from their network structures in wage and unemployment rates.

Keywords: Referral hiring; Temporal network; Network structure; Intergenerational inequality (search for similar items in EconPapers)
JEL-codes: E24 J31 J64 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2023-06
New Economics Papers: this item is included in nep-lab, nep-net, nep-soc and nep-ure
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