Zhang, Rui (2014) Essays on Matching, Outsourcing and Social Networks. Toulouse School of Economics (Toulouse).

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Abstract

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Chapter 1: Getting Job from My Unemployed Friends: A Social Network Perspective. This paper aims to learn the role of social networks formed by unemployed workers in job transmission. We develop a model with an endogenous threshold of workers' job dissatisfaction. Compared with the case without social networks, it is shown that unemployed workers' welfare is higher and unemployment rate is lower. And social planner prefers the workers to become more selective. When networks differ in size, increasing the size difference is beneficial for workers with large social networks but detrimental to those with small ones; in addition, the unemployment rate decreases. However, because of the dilution effect, as the proportion of unemployed workers with large networks increases, it eventually results in losses for all unemployed workers, and the unemployment rate may follow a non-monotonic pattern. / Chapter 2: Another Look at Two-Tier Unemployment Compensation Reforming .This paper analyzes the importance of wage setting scheme in determining the impact of two-tier unemployment compensation reforming. We construct a stylized search model where wages are respectively set through collective and individual Nash bargaining. The model is calibrated with regard to the characteristics of US and French labor market. We first show that reducing the required contribution time of obtaining UI eligibility reduces the unemployment rate when the wage is determined through collective bargaining, but raises the unemployment rate when the wage is set through individual Nash bargaining. We second show that reducing the UI duration raises the unemployment rate no matter how wage is negotiated. Last, by doing a counterfactual simulation, we find that the welfare is lower, wage is lower and unemployment rate is higher when the wage is determined through collective bargaining. / Chapter 3: Exposure to new wave of Offshoring, Unemployment and Welfare. In this paper, we study the impact of increasing service relocation. We construct a simple two sector model and find that when the offshoring technology makes progress in the service sector, domestic unemployment can be reduced if the marginal task-specific offshoring cost is large enough. Reducing unemployment makes hiring domestic workers become more costly and consequently makes firm in the manufacturing sector expand its offshoring scale too. In addition to the analytical result, we do a calibration exercise using the parameters of Belgium and the numerical simulation predicts this possibility. Finally, in a simplified two country framework of offshoring, we show that the progress of offshoring technology reduces the unemployment of the low-wage country, raises global welfare and probably raise the global inequality.