---
_id: '2712105'
abstract:
- lang: eng
text: "This paper presents a search model with heterogeneous workers, social networks
and\r\nendogenous search intensity. There are three job search channels available
to the unemployed:\r\ncostly formal applications and two costless informal channels
- through family and\r\nprofessional networks. The gain from being employed is
increasing in the productivity, so\r\nthe lowest motivation for preparing formal
applications is proved to be among the least\r\nproductive worker types. We assume
that professional contacts exhibit a strong degree of\r\nhomophily, thus it is
profitable for firms to direct their network search towards the more\r\nproductive
incumbent employees. So the probability of a professional referral is increasing
in\r\nthe productivity of the worker, which mitigates the incentives to use the
formal channel of\r\nsearch. Therefore, the model predicts that workers in the
right (left) tail of the productivity\r\ndistribution have the highest propensity
of finding a job with a help of professional (family)\r\ncontacts, whereas the
formal channel of search is mostly utilized by workers in the middle\r\nrange
of the distribution. This explains the U-shaped referral hiring pattern in the
model.\r\nThe endogenous sorting of workers across channels also implies that
professional (family)\r\nreferrals are associated with wage premiums (penalties)
compared to the formal channel of\r\nsearch. The average effect of referrals on
wages is, however, ambiguous and depends on the\r\nrelative proportions of high
and low productivity types in the population. These findings help\r\nto explain
the contradicting empirical evidence concerning the effect of referrals on wages."
author:
- first_name: Yuliia
full_name: Stupnytska, Yuliia
id: '28293474'
last_name: Stupnytska
- first_name: Anna
full_name: Zaharieva, Anna
id: '22426124'
last_name: Zaharieva
citation:
ama: '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. Vol 511. Bielefeld: Center for Mathematical Economics;
2014.'
angewandte-chemie: Y. Stupnytska, and A. Zaharieva, *Explaining the U-Shape
of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers*,
Center For Mathematical Economics, Bielefeld, **2014**.
apa: 'Stupnytska, Y., & Zaharieva, A. (2014). *Explaining the U-Shape of
the Referral Hiring Pattern in a Search Model with Heterogeneous Workers*
(Center for Mathematical Economics Working Papers, 511). Bielefeld: Center for
Mathematical Economics.'
apa_indent: 'Stupnytska,
Y., & Zaharieva, A. (2014). *Explaining the U-Shape of the Referral Hiring
Pattern in a Search Model with Heterogeneous Workers* (Center for Mathematical
Economics Working Papers, 511). Bielefeld: Center for Mathematical Economics.

'
bio1: 'Stupnytska Y, Zaharieva A (2014)

*Explaining the U-Shape of the
Referral Hiring Pattern in a Search Model with Heterogeneous Workers*. Center
for Mathematical Economics Working Papers; 511.

Bielefeld: Center for Mathematical
Economics.'
chicago: 'Stupnytska,
Yuliia, and Zaharieva, Anna. 2014. *Explaining the U-Shape of the Referral
Hiring Pattern in a Search Model with Heterogeneous Workers*. Vol. 511. Center
for Mathematical Economics Working Papers. Bielefeld: Center for Mathematical
Economics.

'
default: 'Stupnytska Y, Zaharieva A (2014) Center for Mathematical Economics Working
Papers; 511.

Bielefeld: Center for Mathematical Economics.'
dgps: 'Stupnytska,
Y. & Zaharieva, A. (2014). *Explaining the U-Shape of the Referral Hiring
Pattern in a Search Model with Heterogeneous Workers* (Center for Mathematical
Economics Working Papers). Bielefeld: Center for Mathematical Economics.

'
frontiers: 'Stupnytska, Y., and Zaharieva, A. (2014). Explaining the U-Shape of
the Referral Hiring Pattern in a Search Model with Heterogeneous Workers. *Center
for Mathematical Economics Working Papers*, 511, Bielefeld: Center for Mathematical
Economics.'
harvard1: 'Stupnytska, Y., & Zaharieva, A., 2014. *Explaining the U-Shape
of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers*,
Center for Mathematical Economics Working Papers, no.511, Bielefeld: Center for
Mathematical Economics.'
ieee: ' Y. Stupnytska and A. Zaharieva, *Explaining the U-Shape of the Referral
Hiring Pattern in a Search Model with Heterogeneous Workers*, Center for Mathematical
Economics Working Papers, vol. 511, Bielefeld: Center for Mathematical Economics,
2014.'
lncs: ' 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).'
mla: 'Stupnytska, Yuliia, and Zaharieva, Anna. *Explaining the U-Shape of the
Referral Hiring Pattern in a Search Model with Heterogeneous Workers*. Bielefeld:
Center for Mathematical Economics, 2014. Center for Mathematical Economics Working
Papers. 511.'
wels: '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.'
date_created: 2015-01-13T11:45:00Z
date_updated: 2018-07-24T13:01:12Z
ddc:
- '330'
department:
- _id: '42173282'
- _id: '10053'
file:
- access_level: open_access
checksum: 5aa5169f6e945280ac95cf469712c4e8
content_type: application/x-download
creator: weingarten
date_created: 2016-03-30T12:32:03Z
date_updated: 2019-09-06T09:18:29Z
file_id: '2902030'
file_name: IMW_working_paper_511.pdf
file_size: '473481'
relation: main_file
file_date_updated: 2019-09-06T09:18:29Z
has_accepted_license: '1'
intvolume: ' 511'
jel:
- J23
- J31
- J38
- J64
keyword:
- endogenous search intensity
- family contacts
- professional networks
- U-shape
- referral puzzle
- wage premiums and penalties
language:
- iso: eng
locked: '1'
oa: 1
page: '31'
place: Bielefeld
publication_identifier:
issn:
- 0931-6558
publication_status: published
publisher: Center for Mathematical Economics
series_title: Center for Mathematical Economics Working Papers
status: public
title: Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with
Heterogeneous Workers
type: working_paper
urn: urn:nbn:de:0070-pub-27121055
volume: 511
year: '2014'
...