How Do Social Networks Contribute to Wage Inequality? Insights from an Agent-Based Analysis

34 Pages Posted: 8 Mar 2013

See all articles by Herbert Dawid

Herbert Dawid

Bielefeld University - Department of Business Administration and Economics; Center for Mathematical Economics

Simon Gemkow

Bielefeld University

Date Written: January 1, 2013

Abstract

Based on a closed agent-based macroeconomic simulation model (Eurace@Unibi) this paper analyzes whether the density of social networks influences via referrals the residual wage inequality in different skill groups. It is shown that an increase in network density leads to a polarization of firms and a concentration of workers with high specific skills at firms with high productivities (and wages) thereby enlarging within group wage inequality, but not between group wage inequality.

Keywords: wage inequality, social networks, referral hiring, agent-based simulation

JEL Classification: C63, J31, O33

Suggested Citation

Dawid, Herbert and Gemkow, Simon, How Do Social Networks Contribute to Wage Inequality? Insights from an Agent-Based Analysis (January 1, 2013). Bielefeld Working Papers in Economics and Management No. 05-2013, Available at SSRN: https://ssrn.com/abstract=2229810 or http://dx.doi.org/10.2139/ssrn.2229810

Herbert Dawid (Contact Author)

Bielefeld University - Department of Business Administration and Economics ( email )

P.O. Box 100131
D-33501 Bielefeld, NRW 33501
Germany
+49-521-1064843 (Phone)
+49-521-1062994 (Fax)

Center for Mathematical Economics ( email )

Postfach 10 01 31
Bielefeld, D-33501
Germany

Simon Gemkow

Bielefeld University ( email )

Universit├Ątsstra├če 25
Bielefeld, NRW 33613
Germany

Do you want regular updates from SSRN on Twitter?

Paper statistics

Downloads
67
Abstract Views
625
rank
448,382
PlumX Metrics