Low wages and high unemployment rates : The role of social interactions in hiring discrimination

Jacques, Jean-François; Walkowiak, Emmanuelle

Jacques, Jean-François; Walkowiak, Emmanuelle (2009), Low wages and high unemployment rates : The role of social interactions in hiring discrimination, The Journal of Socio-Economics, 38, 3, p. 456-463. http://dx.doi.org/10.1016/j.socec.2008.12.008

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Type

Article accepté pour publication ou publié

Date

2009

Journal name

The Journal of Socio-Economics

Volume

Number

Publisher

Elsevier

Pages

456-463

Abstract (EN)

The purpose of this paper is to explain why low-wage workers with identical qualifications to higher-wage workers are more exposed to unemployment. Each worker is considered to belong to a social group (defined according to his/her gender, age, and nationality). We assume that workers experience both productive interdependencies and social interactions within the firm. Also inter- and intra-group interactions determine worker productivity, and frictions on the labor market limit the hiring of the most productive workers. Consequently, externalities acting both within the firm and in the labor market can lead to a higher rate of unemployment for low-wage workers.

Subjects / Keywords

Unemployment rate; Social interactions; Discrimination

JEL

J41 - Labor Contracts
J82 - Labor Force Composition
D23 - Organizational Behavior; Transaction Costs; Property Rights
Z13 - Economic Sociology; Economic Anthropology; Social and Economic Stratification