The paper by Calvó-Armengol and Jackson explores the impact of social networks on employment and inequality. They develop a model where agents obtain job information through a network of social contacts, showing that employment is positively correlated across time and agents. Unemployment exhibits duration dependence, meaning the probability of finding a job decreases with the length of unemployment. The authors also examine inequality between two groups, finding that if staying in the labor market is costly and one group starts with worse employment status, their drop-out rate will be higher, leading to persistent inequality in employment prospects. The model predicts that improving the status of one agent can benefit their connections, suggesting local increasing returns to education and affirmative action policies. The paper provides insights into the dynamics of employment and the persistence of unemployment, highlighting the importance of network structure and initial conditions in shaping labor market outcomes.The paper by Calvó-Armengol and Jackson explores the impact of social networks on employment and inequality. They develop a model where agents obtain job information through a network of social contacts, showing that employment is positively correlated across time and agents. Unemployment exhibits duration dependence, meaning the probability of finding a job decreases with the length of unemployment. The authors also examine inequality between two groups, finding that if staying in the labor market is costly and one group starts with worse employment status, their drop-out rate will be higher, leading to persistent inequality in employment prospects. The model predicts that improving the status of one agent can benefit their connections, suggesting local increasing returns to education and affirmative action policies. The paper provides insights into the dynamics of employment and the persistence of unemployment, highlighting the importance of network structure and initial conditions in shaping labor market outcomes.