Abstract

http://ssrn.com/abstract=2441471
 
 

Citations (2)



 


 



Do Informal Referrals Lead to Better Matches? Evidence from a Firm's Employee Referral System


Meta Brown


Federal Reserve Bank of New York

Elizabeth Setren


Massachusetts Institute of Technology (MIT)

Giorgio Topa


Federal Reserve Bank of New York


IZA Discussion Paper No. 8175

Abstract:     
Using a new firm-level dataset that includes explicit information on referrals by current employees, we investigate the hiring process and the relationships among referrals, match quality, wage trajectories and turnover for a single U.S. corporation, and test various predictions of theoretical models of labor market referrals. We find that referred candidates are more likely to be hired; experience an initial wage advantage which dissipates over time; and have longer tenure in the firm. Further, the variances of the referred and non-referred wage distributions converge over time. The observed referral effects appear to be stronger at lower skill levels. The data also permit analysis of the role of referrer-referee pair characteristics.

Number of Pages in PDF File: 57

Keywords: referrals, human resources, turnover, wage trajectory

JEL Classification: J30, J63, J64


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Date posted: May 24, 2014  

Suggested Citation

Brown, Meta and Setren, Elizabeth and Topa, Giorgio, Do Informal Referrals Lead to Better Matches? Evidence from a Firm's Employee Referral System. IZA Discussion Paper No. 8175. Available at SSRN: http://ssrn.com/abstract=2441471

Contact Information

Meta Brown (Contact Author)
Federal Reserve Bank of New York ( email )
33 Liberty Street
New York, NY 10045
United States
Elizabeth Setren
Massachusetts Institute of Technology (MIT) ( email )
77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States
Giorgio Topa
Federal Reserve Bank of New York ( email )
33 Liberty Street
New York, NY 10045
United States
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