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A Social Network Analysis of Occupational Segregation

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  • Ioan Sebastian Buhai, Denmark
  • Marco van der Leij, Denmark
  • Department of Economics
  • Center for Corporate Performance (CCP)

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.

Original languageEnglish
Publication year2009
Number of pages42
Publication statusPublished - 2009
EventSociety of Labor Economists - Boston, United States
Duration: 8 May 20099 May 2009
Conference number: 14th annual meeting

Conference

ConferenceSociety of Labor Economists
Number14th annual meeting
CountryUnited States
CityBoston
Period08/05/200909/05/2009

    Research areas

  • Social Networks, Homophily, Inbreeding Bias, Occupational Segregation

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