Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/40678
Authors: 
van der Leij, Marco J.
Buhai, I. Sebastian
Year of Publication: 
2008
Series/Report no.: 
Nota di lavoro // Fondazione Eni Enrico Mattei: CTN, Coalition theory network 2008,31
Abstract: 
We develop a social network model of occupational segregation between different social groups, generated by the existence of positive inbreeding bias among individuals from the same group. If network referrals are important for job search, then expected homophily in the contact network structure induces different career choices for individuals from different social groups. This further translates into stable occupational segregation equilibria in the labor market. We derive the conditions for wage and unemployment inequality in the segregation equilibria and characterize first and second best social welfare optima. Surprisingly, we find that socially optimal policies involve segregation.
Subjects: 
Social Networks
Homophily
Inbreeding Bias
Occupational Segregation
Labor Market Inequality
Social Welfare
JEL: 
J24
J31
J70
Z13
Document Type: 
Working Paper

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