Job Contact Networks, Inequality and Aggregate Output

Andrea Mario Lavezzi, Nicola Meccheri, Andrea Mario Lavezzi

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Abstract

In this paper we study the effects of social networks on wage inequality and aggregate production. In particular, we consider a simplified version of the model by Calvò-Armengol and Jackson (2003), with good and bad jobs and skilled and unskilled workers. Our findings are: i) increasing the number of social links increases aggregate output and may reduce inequality; ii) given a number of social connections, output increases if the average distance among worker decreases; iii) a more mixed and well-integrated society, that is a society in which heterogeneous workers share social links, produces more output and less inequality than a society in which some workers are isolated, when productivity of the most productive agents in the best jobs is sufficiently low. We draw some policy implications from these results.
Lingua originaleEnglish
Titolo della pubblicazione ospiteInnovation, Unemployment and Policy in the Theories of Growth and Distribution
Pagine145-167
Stato di pubblicazionePublished - 2005

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