A Social Network Analysis of Occupational Segregation
Marco Van der Leij
CeNDEF, University of Amsterdam; Tinbergen Institute
Tinbergen Institute; Erasmus University Rotterdam (EUR) - Department of Economics; Aarhus School of Business - Department of Economics
March 1, 2008
FEEM Working Paper No. 31.2008
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, Z13working papers series
Date posted: April 23, 2008
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