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Referral-based Job Search Networks

Dustmann, C; Glitz, A; Schoenberg, U; Bruecker, H; (2016) Referral-based Job Search Networks. The Review of Economic Studies , 83 (2) pp. 514-546. 10.1093/restud/rdv045. Green open access

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Abstract

This article derives novel testable implications of referral-based job search networks in which employees provide employers with information about potential new hires that they otherwise would not have. Using comprehensive matched employer–employee data covering the entire workforce in one large metropolitan labour market combined with unique survey data linked to administrative records, we provide evidence that workers earn higher wages and are less inclined to leave their firms if they have obtained their job through a referral. These effects are particularly strong at the beginning of the employment relationship and decline with tenure in the firm, suggesting that firms and workers learn about workers' productivity over time. Overall, our findings imply that job search networks help to reduce informational deficiencies in the labour market and lead to productivity gains for workers and firms.

Type: Article
Title: Referral-based Job Search Networks
Open access status: An open access version is available from UCL Discovery
DOI: 10.1093/restud/rdv045
Publisher version: http://dx.doi.org/10.1093/restud/rdv045
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: Social Sciences, Economics, Business & Economics, Networks, Referrals, Uncertainty, SOCIAL NETWORKS, OCCUPATIONAL CHOICE, UNEMPLOYED YOUTH, MATCH QUALITY, EMPLOYMENT, INEQUALITY, CONTACTS, WAGES, TURNOVER, TENURE
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/1496243
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