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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 andemployers can be matched together through social networks or through more“formal” methods of search. We show that, in some case, networks substitutefor labor market and that this crowding-out effect may be socially costly.For that reason, a policy increasing the social capital of the disadvantagedworkers can increase the unemployment rate and decrease workers' output.

Résumé

Résumé

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

Keywords

economic policymatchingsocial networksunemploymentE24J64J68Z13politique économiqueappariementréseaux sociauxchômageE24J64J68Z13

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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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