2022/01/16 by Yoshitaka Ogisu, Ogisu, Yoshitaka
Decision Sciences · Engineering · #FOS: Economics and business #Game Theory and Applications #ICT Impact and Policies #Theoretical Economics (econ.TH)
paper · pdf · doi:10.48550/arxiv.2201.06020
openalex publication_date 2022/01/16 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
It is well known that differences in the average number of friends among social groups can cause inequality in the average wage and/or unemployment rate. However, the impact of social network structure on inequality is not evident. In this paper, we show that not only the average number of friends but also the heterogeneity of degree distribution can affect inter-group inequality. A worker group with a scale-free network tends to be disadvantaged in the labor market compared to a group with an Erdős-Rényi network structure. This feature becomes strengthened as the skewness of the degree distribution increases in scale-free networks. We show that the government's policy of discouraging referral hiring worsens social welfare and can exacerbate inequality.