Why the Referential Treatment? Evidence from Field Experiments on Referrals

This paper presents the results of three …eld experiments in an online labor market designed to determine whether referred workers perform better than non-referred workers and, if so, why. We hired workers and asked them to refer others; we then hired all referred and non-referred applicants. Referred workers performed better and had less turnover than non-referred workers. We …nd that this is partially due to selection: referrals outperformed non-referred workers even without any on-the-job interactions with their referrers. We …nd also that team production is important: referrals performed particularly well when working with their referrers.