Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/81314 
Authors: 
Year of Publication: 
2008
Series/Report no.: 
IFN Working Paper No. 755
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
We develop a model where information about jobs is essentially obtained through friends and relatives, i.e. strong and weak ties. Workers commute to a business center to work and to interact with other people. We find that housing prices increase with the level of social interactions in the city because information about jobs is transmitted more rapidly and, as a result, individuals are more likely to be employed and to be able to pay higher land rents. We also show that, under some conditions, workers using more their weak ties than strong ties to find a job receive a higher wage. We finally demonstrate that workers living far away from jobs pay lower housing prices but experience higher unemployment rates than those living close to jobs because they mainly rely on their strong ties to obtain information about jobs.
Subjects: 
Weak Ties
Labor Market
Social Networks
Land Rent
JEL: 
A14
J60
R14
Document Type: 
Working Paper

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