The Role of Social Networks and Organizations in the Intergenerational Transmission of Wage Inequality (A04)

• Subject Area: Economic Policy, Applied Economics
• Term: from 2011 to 2016
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 138713964

A4 analyzes the role of professional networks and work organizations for wage inequality within one generation and across generations based on a benchmark analytical framework and an agent-based simulation model with heterogeneous workers and firms. First, as workers with more pro-fessional ties in higher hierarchical positions can expect faster promotions and a higher wage growth, professional networks will amplify wage dispersion in the labor market. The first goal of the project is, hence, to gain a better understanding how this amplifying effect is related to the hierarchical structure of firms and how firm structures transmit skill heterogeneity to wage ine-quality. Second, we expect that the quality and the structure of the parents network will have an impact on the endogenous educational decisions of the young generation. The project will explore the importance of this mechanism, which transforms heterogeneity with respect to the profes-sional network of the parents to wage inequality, in a simulation setting.

• DFG Programme: Collaborative Research Centres
• Subproject of: SFB 882: From Heterogeneities to Inequalities
• Applicant Institution: Universität Bielefeld
• Project Heads: Professor Dr. Herbert Dawid; Professorin Dr. Anna Zaharieva