The aim of this paper is to provide a new mechanism based on social interactions explaining why minority workers have worse labor-market outcomes than majority workers. Building on Granovetter's idea that weak ties are superior to strong ties for providing support in getting a job, we develop a...

We develop a dynamic model of identity formation that explains why ethnic minorities may choose to adopt oppositional identities (i.e. some individuals may reject or not the dominant culture) and why this behavior may persist over time. We first show that the prevalence of an oppositional...

We develop two different social network models with different economic foundations. In the local-aggregate model, it is the sum of friends' efforts in some activity that affects the utility of each individual while, in the local-average model, it is costly to deviate from the average effort of...

Recent theoretical work has examined the spatial distribution of unemployment using the efficiency wage model as the mechanism by which unemployment arises in the urban economy. This paper extends the standard efficiency wage model in order to allow for behavioural substitution between leisure...

We develop a model where the decision to commit a crime in a neighboring area is a positive function of the percentage of same-race individuals residing in that area since they can provide crucial information on crime possibilities. The model then predicts a positive spatial correlation in crime...

We model a South African city during Apartheid (in which both schooling and mobility are restricted on the basis of race) and after Apartheid (in which no restrictions are imposed). We first show that the inequality between blacks and whites decreases when Apartheid laws are removed. Indeed,...

We develop a model where information about jobs is essentially obtained through friends and relatives, i.e. strong and weak ties. Workers commute to a business centre to work and to interact with other people. We find that housing prices increase with the level of social interactions in the city...

The aim of this Paper is to study the impact of the size and the quality of social networks on the probability of finding a job. We first develop a theoretical model in which individuals are embedded within a network of social relationships. Workers can obtain information about jobs either...

In this Paper survey some recent developments in urban labour economic theory. We first present a benchmark model in which firms set efficiency wages to prevent shirking and to compensate workers for commuting. We show that both wages and unemployment depend on commuting costs, and that housing...

In this paper a two-sector model of urban unemployment is developed which focuses on the formation of a secondary sector under conditions in which a demand shock in the primary sector leads to a sharp increase in unemployment. The optimal location in the secondary sector is shown to be at the...