How urbanization affect employment and social interactions

Yasuhiro Sato and Yves Zenou
Additional contact information
Yves Zenou: GAINS - ARGUMANS - Atelier De Recherche En Gestion De L'université Du Mans - GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université

Post-Print from HAL

Abstract: We develop a model where the unemployed workers in the city can find a job either directly or through weak or strong ties. We show that, in denser areas, individuals choose to interact with more people and meet more random encounters (weak ties) than in sparsely populated areas. We also demonstrate that, for a low urbanization level, there is a unique steady-state equilibrium where workers do not interact with weak ties, while, for a high level of urbanization, there is a unique steady-state equilibrium with full social interactions. We show that these equilibria are usually not socially efficient when the urban population has an intermediate size because there are too few social interactions compared to the social optimum. Finally, even when social interactions are optimal, we show that there is over-urbanization in equilibrium.

Date: 2015-04
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Published in European Economic Review, 2015, 75, pp.131-155. ⟨10.1016/j.euroecorev.2015.01.011⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04329664

DOI: 10.1016/j.euroecorev.2015.01.011

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().