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Is Nepotism Inevitable Under Search and Matching Friction?

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  • Mazumder, Debojyoti
  • Biswas, Rajit

Abstract

The present article develops a search and matching framework to model political nepotism in the job market. The model argues that labor market friction generates incentives for the political leaders to provide nepotism under a democratic set up. Both the leaders optimally choose nepotism when the labor market friction is higher. It is shown that even for a relatively lesser labor market friction at least one leader would always choose nepotism. The results of the basic model remain robust in an extension where followers can pay a price and choose their allegiance, to any one of the political parties.

Suggested Citation

  • Mazumder, Debojyoti & Biswas, Rajit, 2018. "Is Nepotism Inevitable Under Search and Matching Friction?," MPRA Paper 89836, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:89836
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    References listed on IDEAS

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    More about this item

    Keywords

    search and matching; nepotism; political regime change;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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