Sebastian Buhai () and Marco van der Leij
Additional contact information
Sebastian Buhai: Department of Economics, Aarhus School of Business, Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Marco van der Leij: Tinbergen Institute and Erasmus University, Postal: Rotterdam
Abstract: We develop a social network model of occupational segregation between
different social groups, generated by the existence of positive inbreeding
bias among individuals from the same group. If network referrals
are important in getting a job, then expected inbreeding bias in the
contact network structure induces different career choices for individuals
from different social groups. This further translates into stable occupational
segregation equilibria in the labour market. We derive the conditions
for persistent wage and unemployment inequality in the segregation
equilibria. Our framework is proposed as complementary to existing theories
used to explain labour market inequalities between groups divided
by race, ethnicity or gender
Keywords: Social Networks; Inbreeding Bias; Occupational Segregation; Labour Market Inequality
33 pages, November 7, 2006
Full text files
06-11_sebu.pdf
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