Hostname: page-component-78c5997874-4rdpn Total loading time: 0 Render date: 2024-11-20T00:38:06.212Z Has data issue: false hasContentIssue false
  • English
  • Français

Do workers really benefit from their social networks?*

Published online by Cambridge University Press:  17 August 2016

Fontaine François
Fontaine François*
Affiliation:
Institut du Travail, 69, avenuede la Forêt Noire, 67000 Strasbourg, France, Email: francois.fontaine®urs.ustrasbg.fr. Homepage: economics.fontaine.free.fr
Get access

Summary

This paper provides a simple matching model in which unemployed workers and employers can be matched together through social networks or through more “formal” methods of search. We show that, in some case, networks substitute for labor market and that this crowding-out effect may be socially costly. For that reason, a policy increasing the social capital of the disadvantaged workers can increase the unemployment rate and decrease workers' output.

Résumé

Résumé

Cet article propose un modèle simple d'appariement sur le marché du travail où les demandeurs d'emploi et les employeurs peuvent utiliser les réseaux de relations ainsi que d'autres méthodes “formelles” de recherche. Nous montrons que, dans certains cas, les réseaux se substituent au marché et que cet effect de substitution peut être coûteux socialement. Pour cette raison, une politique économique visant à augmenter le capital social des travailleurs les plus désavantagés peut augmenter le taux de chômage et diminuer le bien-être des travailleurs.

Keywords

economic policymatchingsocial networksunemploymentE24J64J68Z13politique économiqueappariementréseaux sociauxchômageE24J64J68Z13
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 74 , Issue 1 , 2008 , pp. 5 - 31
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2008 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Addison, J. and Portugal, P. (2002). “Job Search Methods and Outcomes”, Oxford Economic Papers, 54, 505–533.Google Scholar
Albrecht, J., Gautier, P. and Vroman, S. (2003). “Matching with multiple applications”, Economics Letters, 78, pp. 67–70.Google Scholar
Albrecht, J., Gautier, P. , Vroman, S. and Tan, S. (2004). “Matching with multiple applications revisited”, Economics Letters, 84, pp. 311–314.Google Scholar
Bentolila, S. and Ichino, A. (2006). “Unemployment and Consumption: Are Job Losses Less Painful Near the Mediterranean?”, forthcoming in Journal of Population Economics.Google Scholar
Bentolila, S., Michelacci, C. and Suarez, J. (2003). “Social Contacts and Occupational Choice”, mimeo, CEMFI.Google Scholar
Boorman, S.A. (1975). “A Combinatorial Optimization Model for Transmission of Job Information Through Contact Networks”, Bell Journal of Economics, 6, 216–249.Google Scholar
Bramoullé, Y. and Saint-Paul, G. (2004). “Social Networks and Labor Market Transitions”, mimeo, Université Laval.Google Scholar
Brown, M., Falk, A. and Fehr, E. (2004). “Relational Contracts and the Nature of Market Interactions”, Econometrica, 72, 747–780 Google Scholar
Cahuc, P. and Fontaine, F. (2002). “On the efficiency of Job Search with Social Networks”, CEPR Discussion Paper n°3511 www.cepr.org.Google Scholar
Cahuc, P., Postel-Vinay, F. and Robin, J-M. (2006). “Wage Bargaining with On-the-Job Search: Theory and Evidence”, Econometrica, 74(2), 323–364.Google Scholar
Calvó-Armengol, A. and Jackson, M. (2004). “The Effects of Social Networks on Employment and Inequality”, American Economic Review, 94, 426–454.Google Scholar
Calvó-Armengol, A. and Zenou, Y. (2005). “Job-Matching, Social Network and Word-of-Mouth Communication”, Journal of Urban Economics, 58, 500–522.Google Scholar
Campbell, K. and Mardsen, P. (1990). “Recruitment and Selection Processes: The Organizational Side of Job Searches”, in Breiger, R. ed., Social Mobility and Social Structure, New York: Cambridge University Press, 59–79.Google Scholar
Cramton, P. (1992). “Strategic Delay in Bargaining with Two-Sided Uncertainty”, The Review of Economic Studies, 59, 205–225.Google Scholar
Fernandez, R.M., Castilla, E.J. and Moore, P. (2000). “Social Capital at Work: Networks and Employment at a Phone Center”, American Journal of Sociology, 105, 1288–1356.Google Scholar
Fontaine, F. (2006). “A Simple Matching Model with Social Networks”, forthcoming in Economics Letters.Google Scholar
Granovetter, M. (1995). Getting a Job: A Study of Contacts and Careers, 2nd edition (Harvard University Press, Cambridge).Google Scholar
Gregg, P. and Wadsworth, J. (1996). “How Effective Are State Employment Agencies? Jobcentre Use and Job Matching in Britain”, Oxford Bulletin of Economics and Statistics, 58, 43–67.Google Scholar
Hamermesh, D. (1993). Labor Demand, Princeton University Press.Google Scholar
Hansen, S. and Pratt, G. (1991). “Job Search and the Occupational Segregation of Women”, Annals of the Association of American Geographers 81(2), 229–253.Google Scholar
Holzer, H. (1987). “Hiring Procedures in the Firm: Their Economic Determinants and Outcomes”, in: Kleiner, M. ed., Human Ressources and the Performance of the Firm, Wis.: Industrial Relation Research Association, 243–274.Google Scholar
Holzer, H. (1988). “Search Methods Used by Unemployed Youth”, Journal of Labor Economics, 6, 1–21.Google Scholar
Hosios, D. (1990). “On the Efficiency of Matching and Related Models of Search and Unemployment”, Review of Economic Studies, 57, 279–298.Google Scholar
Kugler, A. (2003). “Employee Referrals and Efficiency Wages”, Labour Economics, 10(5), 531–556.Google Scholar
Margolis, D.N. and Simonnet, V. (2002). “Educationnal Track, Networks and Labor Market Outcomes”, mimeo, Université Parisi.Google Scholar
Marmaros, D. and Sacerdote, B. (2002). “Peer and social networks in job search”, European Economic Review, 46, 870–879.Google Scholar
McClure, P. (2000). “Participation Support for a More Equitable Society”, in Final Report of the Reference Group on Welfare Reform (Canberra, Australia: Department of Family and Community Services).Google Scholar
McPherson, M., Smith-Lovin, L. and Cook, J.M. (2001). “Birds of a feather: Homophily in social networks”, Annual Review of Sociology, 27, 415–444.Google Scholar
Montgomery, D. (1991). “Social Networks and Labor Market Outcomes: Towards an Economic Analysis”, American Economic Review, 81, 1408–1418.Google Scholar
Mortensen, D. and Pissarides, C. (1999). “Job Reallocation, Employment Fluctuations and Unemployment”, in Woodford, M. and Taylor, J. (eds), Handbook of Macroeconomics, Elsevier Science Publisher.Google Scholar
OECD (2001). The well-being of nations: the role of human and social capital, OECD Education and Skills, Paris.Google Scholar
OECD (2003). Economic Surveys 2002–2003: Australia, Paris.Google Scholar
Petersen, T., Saporta, I. and Seidel, M.D. (2000). “Offering a Job: Meritocracy and Social Networks”, American Journal of Sociology, 106, 763–816.Google Scholar
Petrongolo, B. and Pissarides, C. (2001). “Looking into the Blackbox: A Survey of the Matching Function”, Journal of Economic Literature, 39, 390–431.Google Scholar
Pissarides, C. (2000). Equilibrium unemployment theory, 2nd edition (Cambridge, MIT Press).Google Scholar
Rees, A. (1966). “Information Networks in Labor Markets”, American Economic Review, 56, 559–566.Google Scholar
Simon, C and Warner, J. (1992). “Matchmaker, Matchmaker: The Effect of Olf Boy Networks on Job Match Quality, Earnings and Tenure”, Journal of Labor Economics, 10, 306–330.Google Scholar
Stole, L.A. and Zwiebel, J. (1996a). “Intrafirm Bargaining under non-binding contracts”, Review of Economic Studies, 63, 375–410.Google Scholar
Stole, L.A. and Zwiebel, J. (1996b). “Organizational design and technology choice under intrafirm bargaining”, American Economic Review, 86, 195–222.Google Scholar
Topa, G. (2000). “Social Interactions, Local Spillovers and Unemployment”, Review of Economic Studies, 68, 261–295.Google Scholar
Waldinger, R. (1997). “Social Capital or Social Closure? Immigrant Networks in the Labor Market”, Lewis Center for Regional Policy Studies Working Paper Series.Google Scholar