Job Contact Networks, Inequality and Aggregate Economic Performance

Nicola Meccheri () and Andrea Lavezzi

No 164, Computing in Economics and Finance 2004 from Society for Computational Economics

Abstract: In this paper we study the effects of social networks on wage inequality and aggregate production. In particular, we consider a simplified version of the model by Calvò-Armengol and Jackson (2003), with good and bad jobs and skilled and unskilled workers. Our findings are: i) increasing the number of social links increases aggregate output and reduces inequality; ii) given a number of social connections, output increases if the average distance among worker decreases; iii) a more mixed society, that is a society in which heterogeneous worker share social links produces more output and less inequality than a society in which some workers are isolated, when productivity of the most productive agents in the best jobs is sufficiently low. We draw some policy implications from these results

Keywords: networks; labor markets; mismatch; inequality; aggregate production (search for similar items in EconPapers)
JEL-codes: A14 J31 J63 J64 (search for similar items in EconPapers)
Date: 2004-08-11
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sce:scecf4:164

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