1. Information channels in labor markets:On the resilience of referral hiring
- Author
-
Alessandra Casella and Nobuyuki Hanaki
- Subjects
Organizational Behavior and Human Resource Management ,Economics and Econometrics ,Labour economics ,Referral ,media_common.quotation_subject ,jel:D83 ,Personalbeschaffung ,Signalling ,jel:J41 ,ddc:330 ,Labor economics ,J31 ,Productivity ,A14 ,media_common ,jel:A14 ,jel:J31 ,Signaling ,Soziales Netzwerk ,Interpersonal ties ,D83 ,Referral hiring ,Networks, Signaling, Referral hiring, Referral premium ,Action (philosophy) ,Open market operation ,ComputingMethodologies_DOCUMENTANDTEXTPROCESSING ,J41 ,Business ,Psychological resilience ,Networks ,Referral premium - Abstract
application/pdf, Economists and sociologists disagree over markets’ potential to substitute for personal connections. We study a model of labor markets where social ties are stronger between similar individuals, and firms prefer to rely on personal referrals than to hire on the open market. Workers in the market can take a costly action that can signal their productivity. The paper asks whether signaling reduces the reliance on the network.We find that the network is remarkably resilient. Signaling is caught in two contradictory requirements: to be informative it must be expensive, but if it expensive it can be undercut by the network.
- Published
- 2008