working Paper
Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers
published
Yuliia
Stupnytska
author 28293474
Anna
Zaharieva
author 22426124
42173282
department
10053
department
This paper presents a search model with heterogeneous workers, social networks and
endogenous search intensity. There are three job search channels available to the unemployed:
costly formal applications and two costless informal channels - through family and
professional networks. The gain from being employed is increasing in the productivity, so
the lowest motivation for preparing formal applications is proved to be among the least
productive worker types. We assume that professional contacts exhibit a strong degree of
homophily, thus it is profitable for firms to direct their network search towards the more
productive incumbent employees. So the probability of a professional referral is increasing in
the productivity of the worker, which mitigates the incentives to use the formal channel of
search. Therefore, the model predicts that workers in the right (left) tail of the productivity
distribution have the highest propensity of finding a job with a help of professional (family)
contacts, whereas the formal channel of search is mostly utilized by workers in the middle
range of the distribution. This explains the U-shaped referral hiring pattern in the model.
The endogenous sorting of workers across channels also implies that professional (family)
referrals are associated with wage premiums (penalties) compared to the formal channel of
search. The average effect of referrals on wages is, however, ambiguous and depends on the
relative proportions of high and low productivity types in the population. These findings help
to explain the contradicting empirical evidence concerning the effect of referrals on wages.
https://pub.uni-bielefeld.de/download/2712105/2902030/IMW_working_paper_511.pdf
application/x-downloadno
Center for Mathematical Economics2014
eng
endogenous search intensityfamily contactsprofessional networksU-shapereferral puzzlewage premiums and penalties
0931-6558urn:nbn:de:0070-pub-27121055
51131
Stupnytska, Y., and Zaharieva, A. (2014). Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers. <em>Center for Mathematical Economics Working Papers</em>, 511, Bielefeld: Center for Mathematical Economics.
Stupnytska, Y.; Zaharieva, A. (2014): Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers. Bielefeld: Center for Mathematical Economics.
<div style="text-indent:-25px; padding-left:25px;padding-bottom:0px;">Stupnytska, Y. & Zaharieva, A. (2014). <em>Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers</em> (Center for Mathematical Economics Working Papers). Bielefeld: Center for Mathematical Economics.</div>
Stupnytska Y, Zaharieva A (2014) <br /><em>Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers</em>. Center for Mathematical Economics Working Papers; 511.<br />Bielefeld: Center for Mathematical Economics.
Stupnytska, Y., & Zaharieva, A. (2014). <em>Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers</em> (Center for Mathematical Economics Working Papers, 511). Bielefeld: Center for Mathematical Economics.
Stupnytska, Y., & Zaharieva, A., 2014. <em>Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers</em>, Center for Mathematical Economics Working Papers, no.511, Bielefeld: Center for Mathematical Economics.
Stupnytska Y, Zaharieva A (2014) Center for Mathematical Economics Working Papers; 511.<br />Bielefeld: Center for Mathematical Economics.
Y. Stupnytska, and A. Zaharieva, <em>Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers</em>, Center For Mathematical Economics, Bielefeld, <strong>2014</strong>.
Stupnytska, Y., Zaharieva, A.: Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers. Center for Mathematical Economics Working Papers, 511. Center for Mathematical Economics, Bielefeld (2014).
<div style="text-indent:-25px; padding-left:25px;padding-bottom:0px;">Stupnytska, Yuliia, and Zaharieva, Anna. 2014. <em>Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers</em>. Vol. 511. Center for Mathematical Economics Working Papers. Bielefeld: Center for Mathematical Economics.</div>
Y. Stupnytska and A. Zaharieva, <em>Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers</em>, Center for Mathematical Economics Working Papers, vol. 511, Bielefeld: Center for Mathematical Economics, 2014.
Stupnytska, Yuliia, and Zaharieva, Anna. <em>Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers</em>. Bielefeld: Center for Mathematical Economics, 2014. Center for Mathematical Economics Working Papers. 511.
<div style="text-indent:-25px; padding-left:25px;padding-bottom:0px;">Stupnytska, Y., & Zaharieva, A. (2014). <em>Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers</em> (Center for Mathematical Economics Working Papers, 511). Bielefeld: Center for Mathematical Economics.</div>
Stupnytska Y, Zaharieva A. <em>Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers</em>. Center for Mathematical Economics Working Papers. Vol 511. Bielefeld: Center for Mathematical Economics; 2014.
27121052015-01-13T11:45:00Z2018-07-24T13:01:12Z