Social Interactions, Thresholds, and Unemployment in Neighborhoods

Discussion Papers from Department of Economics, Simon Fraser University

Abstract: This paper finds that the predicted unemployment rate in a community increases dramatically when the fraction of neighborhood residents with college degrees drops below twenty percent. This threshold behavior provides empirical support for "epidemic" theories of inner-city unemployment. Using a structural model with unobserved neighborhood heterogeneity in productivity due to sorting, I show that sorting alone cannot generate the observed thresholds without also implying a wage distribution which is inconsistent with that observed in microeconomic data. Social interaction effects are thus a necessary element in any suitable explanation for the data.

Keywords: neighborhood effects; spillovers; networks; social interactions (search for similar items in EconPapers)
JEL-codes: C14 E24 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2000, Revised 2000-03-28
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.sfu.ca/repec-econ/sfu/sfudps/dp00-12.pdf (application/pdf)

Related works:
Working Paper: Social Interactions, Thresholds, and Unemployment in Neighborhoods (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sfu:sfudps:dp00-12

Ordering information: This working paper can be ordered from

The price is Canada/United States-$3.00(Cdn)/paper,International-$5.00/paper.

Access Statistics for this paper

More papers in Discussion Papers from Department of Economics, Simon Fraser University Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by Working Paper Coordinator ().