Weak Ties, Employment, and Inequality: An Equilibrium Analysis

This article adds a simple social structure and pattern of social interaction to a Markov model of employment transitions. In the model, society is composed fo many small (two-person) groups. Unemployed individuals find jobs through strong ties (intragroup social interaction), weak ties (random intergroup interaction), and formal channels. Holding constant the total level of social interaction affects the steady-state equilibrium. An increase in weak-tie interactions reduces inequality, thereby creating a more equitable distribution of employment across groups. Moreover, an increase in weak-tie interactions increases the steady-state employment rate if inbreeding by employment status among weak ties is sufficiently low.