Job Referral Networks and the Determination of Earnings in Local Labor Markets

Ian Schmutte

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Referral networks may affect the efficiency and equity of labor market outcomes, but few studies have been able to identify earnings effects empirically. To make progress, I set up a model of on-the-job search in which referral networks channel information about high-paying jobs. I evaluate the model using employer-employee matched data for the U.S. linked to the Census block of residence for each worker. The referral effect is identified by variations in the quality of local referral networks within narrowly defined neighborhoods. I find, consistent with the model, a positive and significant role for local referral networks on the full distribution of earnings outcomes from job search.

Keywords: Social Interactions; Informal Hiring Networks; Wage Variation; Neighborhood Effects (search for similar items in EconPapers)
JEL-codes: J31 J64 R23 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2010-12
New Economics Papers: this item is included in nep-lab, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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https://www2.census.gov/ces/wp/2010/CES-WP-10-40.pdf First version, 2010 (application/pdf)

Related works:
Journal Article: Job Referral Networks and the Determination of Earnings in Local Labor Markets (2015)
Working Paper: Job Referral Networks and the Determination of Earnings in Local Labor Markets (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:10-40

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