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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
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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 

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