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Random or Referral Hiring: When Social Connections Matter

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  • Nicodemo, Catia

    ()
    (University of Oxford)

  • Nicolini, Rosella

    ()
    (Universitat Autònoma de Barcelona)

Abstract

This study investigates the existence of hiring criteria associated with the degree of social connections between skill and low-skill workers. We provide evidence about to what extent managers rely on their social connections in recruiting low-skill workers rather than on random matching. As one unique feature we follow an approach for a posted wage setting that reflects the main features of the Spanish labor market. By working with sub-samples of high and low-skill workers we are able to assess that the recruitment of low-skill immigrants quite often follows a referral strategy and we identify interesting irregularities across the ethnic groups. As a common feature, referral hiring is usually influences by the ethnicity of the manager and the relative proportion of immigrants within the firm. Under these perspectives, our study outlines new insights to evaluate the future perspectives of the Spanish labor market.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6312.

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Length: 37 pages
Date of creation: Jan 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6312

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Related research

Keywords: ethnicity; hiring strategies; social networks;

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References

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  1. Giovanni Peri & Chad Sparber, 2009. "Task Specialization, Immigration, and Wages," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 135-69, July.
  2. Deepti Goel & Kevin Lang, 2010. "Social Ties and the Job Search of Recent Immigrants," Carlo Alberto Notebooks 148, Collegio Carlo Alberto.
  3. Laura Giuliano & David I. Levine & Jonathon Leonard, 2006. "Manager Race and the Race of New Hires," Working Papers 0722, University of Miami, Department of Economics.
  4. Lidia Farre & Libertad Gonzalez & Francesc Ortega, 2009. "Immigration, Family Responsibilities and the Labor Supply of Skilled Native Women," CReAM Discussion Paper Series 0916, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  5. Bernt Bratsberg & Oddbjørn Raaum, 2012. "Immigration and Wages: Evidence from Construction," Economic Journal, Royal Economic Society, vol. 122(565), pages 1177-1205, December.
  6. Casella, Alessandra & Hanaki, Nobuyuki, 2005. "Information Channels in Labour Markets. On the Resilience of Referral Hiring," CEPR Discussion Papers 4969, C.E.P.R. Discussion Papers.
  7. Åslund, Olof & Hensvik, Lena & Nordström Skans, Oskar, 2009. "Seeking similarity: how immigrants and natives manage at the labor market," Working Paper Series 2009:24, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  8. Kevin Lang & Michael Manove & William T. Dickens, 2005. "Racial Discrimination in Labor Markets with Posted Wage Offers," American Economic Review, American Economic Association, vol. 95(4), pages 1327-1340, September.
  9. Catalina Amuedo-Dorantes & Sara de la Rica, 2008. "Complements or Substitutes? Immigrant and Native Task Specialization in Spain," CReAM Discussion Paper Series 0816, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  10. Bandiera, Oriana & Barankay, Iwan & Rasul, Imran, 2009. "Social Connections and Incentives in the Workplace: Evidence from Personnel Data," CEPR Discussion Papers 7114, C.E.P.R. Discussion Papers.
  11. Catia Nicodemo, 2009. "Heterogeneity across Immigrants in the Spanish Labour Market: Advantage and Disadvantage," Working Papers wpdea0909, Department of Applied Economics at Universitat Autonoma of Barcelona.
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