Homelessness and Crime: Do Your Friends Matter?

This paper investigates the influence of friends on crime, using data I collected among the homeless. To estimate the causal effects of friends and of the share of criminal friends on crime, I rely on two instruments. The first is the share of rainy days during one's first year as homeless: rainfall fosters homeless's concentration in sheltered places and increases the probability of interactions. The second is the share of inmates released during one's first year as homeless, which a\ua4ects the supply of criminal friends. I find that one additional friend decreases the probability of incarceration but criminal friends increases it

On the Efficiency of Job Search with Social Networks

This paper provides a simple matching model in which unemployed workers and employers can be matched together through social networks and through more efficient, and also more costly, methods. In this framework, decentralized decisions to utilize social networks in the job search process can be inefficient and give rise to multiple equilibria. More precisely, in a decentralized equilibrium, social networks can be overutilized, with respect to an efficient allocation, in some circumstances and underutilized in others. Moreover, the existence of different job search methods can give rise to a higher job search intensity than the efficient one. This is in sharp contrast with the standard result, derived in matching models, according to which search intensity is always too low if not efficient. Finally, in the presence of different job search methods, conditional unemployment benefits hikes, which can be used as a coordination device to improve welfare when individuals. Copyright � 2009 Wiley Periodicals, Inc..