Why are similar workers paid differently? The role of social networks

Francois Fontaine

Labor and Demography from University Library of Munich, Germany

Abstract: We provide a matching model where identical workers are embedded in ex- ante identical social networks. Job arrival rate is endogeneous and wages are bargained. We study the evolution of networks with time and characterize the equilibrium distribution of unemployment rates across networks. We emphasize that wage dispersion arises endogenously as the consequence of the dynamics of networks, firms' strategies and wage bargaining. Contrary to a generally accepted idea, social networks do not necessary induce stickiness in unemployment dynamics. Our endogenous matching technology shows that the effects of networks on the dynamics mostly hinge on search externalities and not on the correlation between statuses. Our endogenous framework allow us to quantify these effects.

Keywords: social networks; wage dispersion; matching; unemployment persistence (search for similar items in EconPapers)
JEL-codes: E24 J64 J68 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2004-08-25, Revised 2005-01-06
New Economics Papers: this item is included in nep-lab and nep-ure
Note: Type of Document - pdf; pages: 33
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/lab/papers/0408/0408014.pdf (application/pdf)

Related works:
Journal Article: Why are similar workers paid differently? the role of social networks (2008)
Working Paper: Why are similar workers paid differently ? The role of social networks (2005)
Working Paper: Why Are Similar Workers Paid Differently? The Role of Social Networks (2005)
Working Paper: Why are similar workers paid differently? The role of social networks (2004)
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:wpa:wuwpla:0408014

Access Statistics for this paper

More papers in Labor and Demography from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).