A Matching Model on the Use of Immigrant Social Networks and Referral Hiring
AbstractUsing a simple search model, with urn-ball derived matching function, this paper investigates the effect of firm ownerâ€™s and coworkersâ€™ nativity on hiring patterns and wages. In the model, social networks reduce search frictions and wages are derived endogenously as a function of the efficiency of the social ties of current employees. As a result, individuals with more efficient connections tend to receive higher wages and lower unemployment rate. However, because this efficiency depends on matching with same-type owners and coworkers, there is also a differential effect among workersâ€™ wages in the same firm. This analysis highlights the potential importance of social connections and social capital for understanding employment opportunities and wage differentials between these groups.
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Bibliographic InfoPaper provided by Saint Cloud State University, Department of Economics in its series Working Papers with number 2012-21.
Date of creation: 2012
Date of revision:
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More information through EDIRC
immigration; search models; social networks; wage differential; hiring process.;
Find related papers by JEL classification:
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-09 (All new papers)
- NEP-DEM-2012-09-09 (Demographic Economics)
- NEP-DGE-2012-09-09 (Dynamic General Equilibrium)
- NEP-LAB-2012-09-09 (Labour Economics)
- NEP-MIG-2012-09-09 (Economics of Human Migration)
- NEP-SOC-2012-09-09 (Social Norms & Social Capital)
- NEP-URE-2012-09-09 (Urban & Real Estate Economics)
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