Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/62941 
Year of Publication: 
2012
Series/Report no.: 
Staff Report No. 568
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
The limited nature of data on employment referrals in large business and household surveys has so far impeded our efforts to understand the relationships among employment referrals, match quality, wage trajectories, and turnover. Using a new firm-level data set that includes explicit information on whether a worker at the company was referred by a current employee, we are able to provide rich detail on these empirical relationships for a single U.S. corporation and to test various predictions of theoretical models of labor market referrals. Our results align with the following predictions: 1) referred candidates are more likely to be hired, 2) referred workers experience an initial wage advantage, 3) the wage advantage dissipates over time, 4) referred workers have longer tenure in the firm, and 5) the variances of the referred and nonreferred wage distributions converge over time. The richness of the data allows us to analyze the role of referrer-referee relationships, and the size and diversity of the corporation permit analysis of referrals at a wide variety of skill and experience levels.
Subjects: 
referrals
networks
personnel
wage mobility
turnover
JEL: 
J30
J63
J64
Document Type: 
Working Paper

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