Citation

Discussion Paper Details

Please find the details for DP6129 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Social Interactions and Labour Market Outcomes in Cities

Author(s): Yves Zenou

Publication Date: February 2007

Keyword(s): labour market, land rent, social networks, spatial mismatch and weak ties

Programme Area(s): Labour Economics

Abstract: We develop a model where information about jobs is essentially obtained through friends and relatives, i.e. strong and weak ties. Workers commute to a business centre to work and to interact with other people. We find that housing prices increase with the level of social interactions in the city because information about jobs is transmitted more rapidly and, as a result, individuals are more likely to be employed and to be able to pay higher land rents. We extend this framework to incorporate black and white workers. Because whites obtain a higher wage than blacks, they reside closer to jobs to save on commuting time costs. As a result, black workers experience a higher unemployment rate than white workers because they have little contact with weak ties (especially whites) and thus have limited access to job information, relying mainly on their strong ties, who are themselves likely to be unemployed. The lack of ties that act as diverse sources of information is therefore the main cause of blacks' unemployment.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6129

Bibliographic Reference

Zenou, Y. 2007. 'Social Interactions and Labour Market Outcomes in Cities'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6129