Why Do Workers Make Job Referrals? Experimental Evidence from Ethiopia

Marc J. Witte ()
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Marc J. Witte: Vrije Universiteit Amsterdam

No 18258, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: What motivates workers’ referral decisions? Combining a field experiment in a firm and urban social network data, I first show that workers primarily refer those who previously referred them. This reciprocity leads to significant on-the-job productivity losses and excludes less connected individuals. Incentivized referrals reduce reciprocity and make workers screen more productive colleagues. Second, peripheral workers use referrals strategically to establish new and reciprocated links which persist after 18 months. These results are consistent with a network-based referral model where individuals trade off pecuniary and social incentives. The findings suggest that referrals through social networks can reinforce labor market inequalities.

Keywords: field experiment; social networks; job referrals (search for similar items in EconPapers)
Date: 2025-11
New Economics Papers: this item is included in nep-exp, nep-net and nep-soc
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