Wage Dynamics and Peer Referrals

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15 Décembre 2016
Types de publication: 
Cahier de recherche
Auteur(s): 
Vincent Boucher
Marion Goussé
Axe de recherche: 
Enjeux économiques et financiers
Mots-clés: 
Labour Market
Peer Referrals
Social Networks
Classification JEL: 
C33
J31
J46

We present a flexible model of wage dynamics where information about job openings is transmitted through social networks. The model is based on Calvò-Armengol & Jackson (2004, 2007) and extends their results outside the stationary distribution, and under observed and unobserved heterogeneity. We present an empirical application using the British Household Panel Survey by exploiting direct information about individual's social networks. We find that having more employed friends leads to more job offers but to lower wages due to higher mismatch. We also find that non-relative friends are more helpful than relatives, and that women benefit relatively more from their male friends.

Contact: 

Boucher: Department of Economics, Université Laval, CRREP and CREATE vincent.boucher@ecn.ulaval.ca.
Goussée: Department of Economics, Université Laval and CRREP, marion.gousse@ecn.ulaval.ca