Social networking and inequality: the role of clustered networks

The paper aims to analyse how income inequality affects social networking in 14 European countries. By using the European Community Household Panel, we introduce new evidence to test the network-inequality nexus and construct inequality indexes directly from the microdata as well their decomposition. We explore how total income inequality is related to three specific levels of social networking; then, we introduce the 'clustered network' definition, decomposing total income inequality based on education level. The key idea is that higher income inequality among differently educated individuals (between inequality) boosts social networks while higher income inequality among individuals with similar education (within inequality) halts social networking.