Employee referrals and efficiency wages

Mostra el registre complet Registre parcial de l'ítem

• dc.contributor.author Kugler, Adrianaca
• dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
• dc.date.accessioned 2017-07-26T10:50:03Z
• dc.date.available 2017-07-26T10:50:03Z
• dc.date.issued 2002-09-01
• dc.date.modified 2017-07-23T02:07:14Z
• dc.description.abstract Many workers believe that personal contacts are crucial for obtaining jobs in high-wage sectors. On the other hand, firms in high-wage sectors report using employee referrals because they help provide screening and monitoring of new employees. This paper develops a matching model that can explain the link between inter-industry wage differentials and use of employee referrals. Referrals lower monitoring costs because high-effort referees can exert peer pressure on co-workers, allowing firms to pay lower efficiency wages. On the other hand, informal search provides fewer job and applicant contacts than formal methods (e.g., newspaper ads). In equilibrium, the matching process generates segmentation in the labor market because of heterogeneity in the size of referral networks. Referrals match good high-paying jobs to well-connected workers, while formal methods match less attractive jobs to less-connected workers. Industry-level data show a positive correlation between industry wage premia and use of employee referrals. Moreover, evidence using the NLSY shows similar positive and significant OLS and fixed-effects estimates of the returns to employee referrals, but insignificant effects once sector of employment is controlled for. This evidence suggests referred workers earn higher wages not because of higher unobserved ability or better matches but rather because they are hired in high-wage sectors.
• dc.format.mimetype application/pdfca
• dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=647
• dc.identifier.citation Labour Economics, 10, 5, (2003), pp. 531-556
• dc.identifier.uri http://hdl.handle.net/10230/447
• dc.language.iso eng
• dc.relation.ispartofseries Economics and Business Working Papers Series; 647
• dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
• dc.subject.keyword inter-industry wage differentials
• dc.subject.keyword efficiency wage models
• dc.subject.keyword matching models
• dc.subject.keyword social networks
• dc.subject.keyword segmentation
• dc.subject.keyword unemployment
• dc.subject.keyword Labour, Public, Development and Health Economics
• dc.title Employee referrals and efficiency wagesca
• dc.type info:eu-repo/semantics/workingPaper