The wage effects from the use of personal contacts as hiring channels
AbstractIt has been argued that the use of personal networks in the hiring process has a positive influence on the wages of referred individuals. However, the value of recommendations to the employer varies according to the type of vacancy to be filled and the provider of information on job applicants. Using data from a manufacturing firm, which combine wages from the personnel files and job-histories from interviews with the workers, it is shown that new recruits receive a higher starting wage when recommended to the job by an individual who has direct experience of their productivity. On the contrary, the use of referrals from friends and relatives has no effect on the starting wage and may even be negatively related to wages of workers in unskilled jobs.
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Bibliographic InfoPaper provided by EconWPA in its series Development and Comp Systems with number 0409044.
Length: 22 pages
Date of creation: 28 Sep 2004
Date of revision:
Note: Type of Document - pdf; pages: 22
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recruitment; networks; employee referrals; Egypt;
Find related papers by JEL classification:
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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