Missing Links: Referrer Behavior and Job Segregation
Roberto M. Fernandez
Massachusetts Institute of Technology (MIT) - Sloan School of Management
June 21, 2010
MIT Sloan Research Paper No. 4784-10
How does referral recruitment contribute to job segregation, and what can organizations do about it? Current theory on network effects in the labor market emphasizes the job-seeker perspective, focusing on the segregated nature of job-seekers’ information and contact networks, and leaves little role for organizational influence. But employee referrals are necessarily initiated from within a firm by referrers. We argue that referrer behavior is the missing link that can help organizations manage the segregating effects of referring.
Adopting the referrer’s perspective of the process, we develop a computational model which integrates a set of empirically documented referrer behavior mechanisms gleaned from extant organizational case studies.
Using this model, we compare the segregating effects of referring when these behaviors are inactive to the effects when the behaviors are active. We show that referrer behaviors substantially boost the segregating effects of referring. This impact of referrer behavior presents an opportunity for organizations. Contrary to popular wisdom, we show that organizational policies designed to influence referrer behaviors can mitigate most if not all of the segregating effects of referring.
Number of Pages in PDF File: 60
Keywords: Job Segregation, Labor Market
Date posted: June 22, 2010