Getting a Job through Unemployed Friends: A Social Network Perspective

摘要

We develop a model in which unemployed workers can pass along unwanted job information to other unemployedrnfriends within social networks. Compared with the case in the absence of social networks, we first showrnin an economy where networks are equal in size that unemployment rate is lower. In terms of social welfare,rnsocial planner prefers workers becoming more selective than the decentralized equilibrium. When social networksrndiffer in size, increasing the size difference is beneficial for unemployed workers with large networks butrndetrimental to those with small networks; in addition, the unemployment rate decreases with the size difference.rnHowever, because of the dilution effect, as the proportion of unemployed workers with large networksrnincreases, it eventually results in losses for all unemployed workers, and the unemployment rate may follow arnnon-monotonic pattern.