Social Networks and Labor Market Transitions

Yann Bramoullé () and Gilles Saint-Paul ()

No 1215, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: We study the influence of social networks on labor market transitions. We develop the first model where social ties and job status coevolve through time. Our key assumption is that the probability of formation of a new tie is greater between two employed individuals than between an employed and an unemployed individual. We show that this assumption generates negative duration dependence of exit rates from unemployment. Our model has a number of novel testable implications. For instance, we show that a higher connectivity among unemployed individuals reduces duration dependence and that exit rates depend positively on the duration of the last job held by the unemployed worker.

Keywords: social networks; unemployment duration; labor market transitions; social capital; economic inbreeding (search for similar items in EconPapers)
JEL-codes: E24 J6 Z13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ure
Date: 2004-07

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Related works:
Working Paper: Social Networks and Labor Market Transitions (2004)
Working Paper: Social Networks and Labour Market Transitions (2004)
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