Information, Mobile Communication, and Referral Effects

57 Pages Posted: 11 Jun 2019 Last revised: 29 Jul 2019

See all articles by Panle Jia Barwick

Panle Jia Barwick

Cornell University - Department of Economics

Yanyan Liu

International Food Policy Research Institute (IFPRI)

Eleonora Patacchini

Cornell University

Qi Wu

Cornell University - Department of Economics

Date Written: June 2019

Abstract

Information is a crucial ingredient in economic decision making. Yet measuring the extent of information exchange among individuals and its effect on economic outcomes is a difficult task. We use the universe of de-identified cellphone usage records from more than one million users in a Chinese city over twelve months to quantify information exchange among individuals and examine the role of referrals -- human carriers of information -- in urban labor markets. We present the first evidence that information flow (measured by call volume) correlates strongly with worker flows, a pattern that persists at different levels of geographic aggregation. Condition on information flow, socioeconomic diversity in information sources (social contacts), especially that associated with the working population, is crucial and helps to predict worker flows. We supplement our phone records with auxiliary data sets on residential housing prices, job postings, and firm attributes from administrative data. Information passed on through referrals is valuable: referred jobs are associated with higher monetary gains, a higher likelihood to transition from part-time to full-time, reduced commuting time, and a higher probability of entering desirable jobs. Referral information is more valuable for young workers, people switching jobs from suburbs to the inner city, and those changing their industrial sector. Firms receiving referrals are more likely to have successful recruits and experience faster growth.

Keywords: Entrop, Information, Mobile Communication, Social Networks, Urban Labor Market

JEL Classification: J60, L15, R23

Suggested Citation

Jia Barwick, Panle and Liu, Yanyan and Patacchini, Eleonora and Wu, Qi, Information, Mobile Communication, and Referral Effects (June 2019). CEPR Discussion Paper No. DP13786. Available at SSRN: https://ssrn.com/abstract=3401873

Panle Jia Barwick (Contact Author)

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States

Yanyan Liu

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Eleonora Patacchini

Cornell University ( email )

Ithaca, NY 14853
United States

Qi Wu

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States

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