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A Social Network Analysis of Occupational SegregationMarco Van der LeijCeNDEF, University of Amsterdam; Tinbergen Institute Sebastian BuhaiTinbergen Institute; Erasmus University Rotterdam (EUR) - Department of Economics; Aarhus School of Business - Department of Economics March 1, 2008 FEEM Working Paper No. 31.2008 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.
Number of Pages in PDF File: 45 Keywords: Social Networks, Homophily, Inbreeding Bias, Occupational Segregation, Labor Market Inequality, Social Welfare JEL Classification: J24, J31, J70, Z13 working papers seriesDate posted: April 23, 2008Suggested CitationContact Information
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