Learning about match quality and the use of referrals

Galenianos, Manolis

doi:10.1016/j.red.2012.11.005

Cited by 81 publications

(75 citation statements)

References 22 publications

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“…Having observed those wages, workers decide whether or not to enter the search market in the third stage. Once in the search market, workers 11 See footnote 11 about how the correlation between c and worker types can affect our result. In what follows, we construct a labor market equilibrium which has the following characteristics.…”

Section: Setupmentioning

confidence: 91%

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Understanding the Role of the Public Employment Agency

Holzner

Watanabe

2016

SSRN Journal

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Using a unique vacancy dataset, we find that the Public Employment Agency (PEA) distributes workers more evenly across vacancies than the private market. We investigate the implications of having such a market place by using a directed search model, where firms can search via the PEA or the private market. Lower coordination frictions reduce wage competition and enable registered firms to pay lower wages compared to the private market. This advantage has to be traded off against the negative selection of applicants coming through the PEA. We take these theoretical predictions to the data and find strong support for them.

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Section: Setupmentioning

confidence: 91%

“…11 For now, we assume that v is exogenously given and the firms' cost required to post a vacancy is normalized to zero for both markets. How workers search without coordination will be specified below.…”

Section: Setupmentioning

confidence: 99%

Understanding the Role of the Public Employment Agency

Holzner

Watanabe

2016

SSRN Journal

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“…16 Again, we include only …rst time hires and non-interns. 17 Further, the employee data include only the main location (because other minor locations were signi…cantly scaled down over the sample period) and exclude the top executives of the corporation.…”

Section: Employee Datamentioning

confidence: 99%

Do Informal Referrals Lead to Better Matches? Evidence from a Firm's Employee Referral System

2012

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 8175 May 2014ABSTRACT Do Informal Referrals Lead to Better Matches? Evidence from a Firm's Employee Referral System * Using a new firm-level dataset that includes explicit information on referrals by current employees, we investigate the hiring process and the relationships among referrals, match quality, wage trajectories and turnover for a single U.S. corporation, and test various predictions of theoretical models of labor market referrals. We find that referred candidates are more likely to be hired; experience an initial wage advantage which dissipates over time; and have longer tenure in the firm. Further, the variances of the referred and non-referred wage distributions converge over time. The observed referral effects appear to be stronger at lower skill levels. The data also permit analysis of the role of referrer-referee pair characteristics. JEL Classification:J30, J63, J64

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“…Second, when the average productivity of the groups are the same, while the signals are differently informative. Dustmann et al (2011) and Galenianos (2013) assume different uncertainty of signals between the workers matched through referrals and formal channels, which is like the second case. We rather follow the first case when introducing inequality between the groups.…”

Section: Introductionmentioning

confidence: 99%

“…Let us first discuss the models and the main findings of the literature, particularly, the model predictions and empirical results on the effects of search methods on the wage and probability to be hired. Most of the studies conducted agree that using informal search methods increases the probability to be hired, but the model predictions and empirical results on wage effect are mixed: some authors find positive wage effect (see Montgomery (1991), Dustmann et al (2011), Galenianos (2013)), while others find the effect to be negative (Pistaferri (1999), Bentolila et al (2010)). …”

Section: Introductionmentioning

confidence: 99%

Why Do Migrant Workers Rely More Often on Referrals?

Alaverdyan

2018

SSRN Journal

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Intuitively, one can expect that migrant workers have smaller social networks in the new destination country and by that smaller probability of finding a job through referrals. However, empirical analysis of the SOEP data from 2002 to 2008 show that 41.21% of migrant workers and 31.79% of native workers found their current job through referrals. Estimation results of the panel probit model with random effects show that 7.26% statistically significant difference of the predicted probabilities of using referrals between migrant and native workers is not explained by the characteristics of the individuals and firms. In order to explain this puzzle, this paper presents a search and matching model with heterogeneous worker groups and several search channels. The firm observes the noisy signal of the productivity, the nationality and the search channel of the worker to form unbiased expectations about the true productivity of the worker. The probabilities to be hired for the two worker groups and different search channels are determined using ex-ante union bargained wage and expectations of the firm. Calibration results of the model show that even when migrant workers have smaller size of the social network, they gain more from recommendations, because their employment chances are initially much lower than employment chances of native workers.

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Learning about match quality and the use of referrals

Cited by 81 publications

References 22 publications

Understanding the Role of the Public Employment Agency

Understanding the Role of the Public Employment Agency

Do Informal Referrals Lead to Better Matches? Evidence from a Firm's Employee Referral System

Why Do Migrant Workers Rely More Often on Referrals?

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