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Professional Networks, Firm Hierarchies and Wage Inequality

The Role of Professional Networks and Firm Hierarchies for Individual Careers and Wage Inequality

Funded by the German Science Foundation (DFG) from 2017-2020.

 

Principal Investigators

Herbert Dawid

Anna Zaharieva

 

Short Description:

The purpose of this project is to investigate, from a theoretical perspective, the role of professional networks and firm hierarchies for individual wage dynamics, income inequality and intergenerational mobility. Existing empirical literature reports growing wage inequality in developed economies, which largely takes the form of a widening wage gap between high and low skill workers (wage polarization). In this project we aim to investigate whether an increase in importance of social networks on the labor market can contribute to a rise in wage inequality and an increase in the positive correlation of wage income between generations. The innovative aspect of our project relative to the existing literature is a unified treatment of the evolution of professional networks and career paths of workers in hierarchical firms. In the first stage of the project we will develop a search and matching model of the labour market with heterogeneous skill groups, experience accumulation and hierarchical firms. In the second stage the evolution of professional networks will be endogenized capturing the fact that social ties are often established between coworkers on the same hierarchical level. Taking into account that social ties play a role in career development, the emerging homophily in the social network in this framework may intensify the endogenous sorting of high (low) skill workers to higher (lower) hierarchical positions within firms. A crucial goal of the project is to gain a sound understanding of the effect of these mechanisms on individual career prospects and wage inequality. Finally, it will be explored how the intergenerational correlation of wages is amplified if children have access to the professional network of their parents. Whereas we expect to provide characterizations of the equilibrium with endogenous promotion times in hierarchical firms by analytical means, we will rely on (agent-based) simulations of the models with endogenous networks in the second stage of the project.

 

Aktuelles

Conference Presentation

2019-05-21

Herbert Dawid will give an invited talk on 'The Effect of De-centralized Wage Setting on Growth and Inequality: The Role of Skill Heterogeneity' at the ICC-Tsinghua University Conference on 'Innovation, Macroeconomic Dynamics, Economic Development and Catch-Up' from May 23-25, 2019 in Beijing.

Newspaper Article

2019-05-15

The daily newspaper Westfalenblatt reports on the tradition of game theoretic research at Bielefeld University featuring Herbert Dawid (Spieltheorie hat Tradition in Bielefeld)

New Working Paper

2019-05-06

Dawid, H., Harting, Ph., Neugart, M. (2019) The Role of (De-)Centralized Wage Setting for Industry Dynamics and Economic Growth: An Agent-Based Analysis with the Eurace@Unibi Model, Bielefeld Working Paper 06_2019

New Journal Publication

2019-04-29

Gezer, S. (2019) Delaying product introduction: A dynamic analysis with endogenous time horizon, Journal of Economic Dynamics and Control, Vol. 102, Pages 96-114

New Working Paper

2019-04-23

Dawid, H., Mitkova, M., Zaharieva, A. (2019) Optimal Promotions of Competing Firms in a Frictional Labour Market with Organizational Hierarchies, Bielefeld Working Papers 03-2019

New Working Paper

2019-04-23

Dawid, H., Kopel, M., Kort, P. (2019) Product Innovation With Partial Capacity Rollover, Bielefeld Working Papers No. 2-2019

New Working Paper

2019-03-28

Alaverdyan, S., Zaharieva, A. (2019) Immigration, Social Networks and Occupational Mismatch Bielefeld Working Papers No. 4-2019

Scientific Advisory Board

2019-02-11

Herbert Dawid has been appointed as a member of the Scientific Advisory Board of the ERC Advanced Grant project EVOCLIM. The project analyzes climate policy using a behavioral-evolutionary approach.

GROWINPRO Kick-off Meeting

2019-02-07

On Feb. 5-6 Herbert Dawid and Philipp Harting attend the kick-off meeting in Pisa of the new EU H2020 Project GROWINPRO, in which Bielefeld University is a partner. The project analyzes mechanisms and policies fostering inclusive economic growth in times of increasing automation and globalizing value chains.

Closing Conference of the ZIF Research Group "In Search of the Global Labour Market", 31.01-01.02

2019-01-11

The ZIF research group "In Search of the Global Labour Market" - which is a joint project with Ursula Mense-Petermann and Thomas Welskopp - will hold a large closing conference. The conference will take place in the ZIF Plenary Hall, 31.01-01.02.2019 The exact program is attached.

Poster     Programme

New Working Paper

2018-12-20

Damdinsuren, E., Zaharieva, A. (2018) Expectation Formation and Learning in the Labour Market with On-the-Job Search and Nash Bargaining, Bielefeld Working Papers No. 10/2018.

Workshop

2018-12-20

On December 17-18, 2018 Herbert Dawid, Peter Kort (Univ. Tilburg) and Xingang Wen organized an international Workshop on ' Dynamic Models of Strategic Investment under Uncertainty'. The workshop was carried out within the collaborative research center 'Taming Uncertainty' (CRC1283, https://www.sfb1283.uni-bielefeld.de/Pages/home) at Bielefeld University. see http://www.wiwi.uni-bielefeld.de/lehrbereiche/vwl/etace/Events/

Conference Presentation

2018-11-22

Herbert Dawid has given a talk on 'Agent-based Macroeconomics' at a conference on '10 years after the World Financial Crisis'   in Hamburg from November 16-18.

Research Presentation

2018-11-22

Herbert Dawid has given a talk about 'Product Innovation With Partial Capacity Rollover' in a research symposium at the ceremony awarding the Research Award 2018 of the Austrian Science Association to Gustav Feichtinger (Programm)

Seminar Presentation in Mainz

2018-10-29

Herbert Dawid will give a talk on 'Manager Remuneration, Share Buybacks and Firm Performance' on October 29, 2018 in the Faculty Seminar Series of the Gutenberg School of Management and Economics at the University of Mainz.

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