TRANSITIONS OUT OF UNEMPLOYMENT: THE ROLE OF SOCIAL NETWORKS' TOPOLOGY AND FIRMS' RECRUITMENT STRATEGIES

Abstract

In this paper we study the effects of job contact networks on out-of-unemployment transitions. We find that social connections produce sizable increases in upward mobility from unemployment and, caeteris paribus, symmetric network topologies perform better than asymmetric ones. Furthermore, in scale-free networks the probability of transitions out of unemployment increases in the exponent of the power-law degree distribution, but its value is much lower than the one attainable in Poisson random networks. In addition, and most interestingly, these results strongly depends on the different hypotheses on the firms' recruitment strategy.