Social interaction in the labor market

Essays on earnings inequality, labor substitutability, and segregation

M. Kahanec

Research output: ThesisDoctoral ThesisScientific

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Abstract

Why are most minority groups relatively poor? Why are they poorer in regions where they constitute a relatively large share of the population? Why desegregation of minority people goes hand in hand with increasing inter-ethnic earnings differential? And what are the mutual effects of the presence of various ethnic groups in the labor market on their earnings? The purpose of this thesis is to answer this kind of questions about social and economic interaction of people of different ethnicity, thereby furthering our understanding of the complexities of ethnic and racial relations. In order to accomplish this task, I look into the roles of (i) local spillover effects in human capital acquisition and (ii) social distance between people of different ethnicities in social interaction. It is established that the interaction of such social distances and spillover effects in social interaction of different ethnic groups has important consequences for their labor market outcomes. Perhaps the most important findings of this thesis are that (i) social interaction of different ethnic groups promotes their specialization, (ii) although integration facilitates human capital acquisition, it exposes minority individuals to more intense competition that lowers their relative wage per efficiency unit of labor, (iii) minority and majority labor is complementary in production and thus, in terms of efficiency, majority people benefit from presence of minority co-workers and there are benefits to multiethnic labor force in production, and (iv) the improvement in information and communication technologies promotes desegregation but increases interethnic earnings inequality.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Tilburg University
Supervisors/Advisors
  • van Ours, Jan, Promotor
  • Smulders, Sjak, Co-promotor
Award date17 Feb 2006
Place of PublicationTilburg
Publisher
Print ISBNs9056681583
Publication statusPublished - 2006

Fingerprint

Substitutability
Segregation
Minorities
Labor
Earnings inequality
Labour market
Social interaction
Ethnic groups
Social distance
Human capital
Spillover effects
Interaction
Relative wages
Labor market outcomes
Economics
Information and communication technology
Workers
Labor force
Earnings differentials

Cite this

Kahanec, M.. / Social interaction in the labor market : Essays on earnings inequality, labor substitutability, and segregation. Tilburg : CentER, Center for Economic Research, 2006. 161 p.
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Social interaction in the labor market : Essays on earnings inequality, labor substitutability, and segregation. / Kahanec, M.

Tilburg : CentER, Center for Economic Research, 2006. 161 p.

Research output: ThesisDoctoral ThesisScientific

TY - THES

T1 - Social interaction in the labor market

T2 - Essays on earnings inequality, labor substitutability, and segregation

AU - Kahanec, M.

PY - 2006

Y1 - 2006

N2 - Why are most minority groups relatively poor? Why are they poorer in regions where they constitute a relatively large share of the population? Why desegregation of minority people goes hand in hand with increasing inter-ethnic earnings differential? And what are the mutual effects of the presence of various ethnic groups in the labor market on their earnings? The purpose of this thesis is to answer this kind of questions about social and economic interaction of people of different ethnicity, thereby furthering our understanding of the complexities of ethnic and racial relations. In order to accomplish this task, I look into the roles of (i) local spillover effects in human capital acquisition and (ii) social distance between people of different ethnicities in social interaction. It is established that the interaction of such social distances and spillover effects in social interaction of different ethnic groups has important consequences for their labor market outcomes. Perhaps the most important findings of this thesis are that (i) social interaction of different ethnic groups promotes their specialization, (ii) although integration facilitates human capital acquisition, it exposes minority individuals to more intense competition that lowers their relative wage per efficiency unit of labor, (iii) minority and majority labor is complementary in production and thus, in terms of efficiency, majority people benefit from presence of minority co-workers and there are benefits to multiethnic labor force in production, and (iv) the improvement in information and communication technologies promotes desegregation but increases interethnic earnings inequality.

AB - Why are most minority groups relatively poor? Why are they poorer in regions where they constitute a relatively large share of the population? Why desegregation of minority people goes hand in hand with increasing inter-ethnic earnings differential? And what are the mutual effects of the presence of various ethnic groups in the labor market on their earnings? The purpose of this thesis is to answer this kind of questions about social and economic interaction of people of different ethnicity, thereby furthering our understanding of the complexities of ethnic and racial relations. In order to accomplish this task, I look into the roles of (i) local spillover effects in human capital acquisition and (ii) social distance between people of different ethnicities in social interaction. It is established that the interaction of such social distances and spillover effects in social interaction of different ethnic groups has important consequences for their labor market outcomes. Perhaps the most important findings of this thesis are that (i) social interaction of different ethnic groups promotes their specialization, (ii) although integration facilitates human capital acquisition, it exposes minority individuals to more intense competition that lowers their relative wage per efficiency unit of labor, (iii) minority and majority labor is complementary in production and thus, in terms of efficiency, majority people benefit from presence of minority co-workers and there are benefits to multiethnic labor force in production, and (iv) the improvement in information and communication technologies promotes desegregation but increases interethnic earnings inequality.

M3 - Doctoral Thesis

SN - 9056681583

T3 - CentER Dissertation Series

PB - CentER, Center for Economic Research

CY - Tilburg

ER -

Kahanec M. Social interaction in the labor market: Essays on earnings inequality, labor substitutability, and segregation. Tilburg: CentER, Center for Economic Research, 2006. 161 p. (CentER Dissertation Series).