The Heterogeneous Impact of Referrals on Labor Market Outcomes

Benjamin Lester, David Rivers and Giorgio Topa

No 987, Staff Reports from Federal Reserve Bank of New York

Abstract: We document a new set of facts regarding the impact of referrals on labor market outcomes. Our results highlight the importance of distinguishing between different types of referrals—those from family and friends and those from business contacts—and different occupations. Then we develop an on-the-job search model that incorporates referrals and calibrate the model to key moments in the data. The calibrated model yields new insights into the roles played by different types of referrals in the match formation process, and provides quantitative estimates of the effects of referrals on employment, earnings, output, and inequality.

Keywords: labor markets; referrals; networks; search theory; asymmetric information (search for similar items in EconPapers)
JEL-codes: E42 E43 E44 E52 E58 (search for similar items in EconPapers)
Pages: 52
Date: 2021-10-01
New Economics Papers: this item is included in nep-dge, nep-mac, nep-net, nep-ore and nep-ure
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Citations: View citations in EconPapers (3)

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Working Paper: The Heterogeneous Impact of Referrals on Labor Market Outcomes (2021)
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