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Social networks and job referrals in recruitment

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  • Lalanne, Marie

Abstract

Social contacts help getting a job through two mechanisms: by providing information on job opportunities or working conditions to job seekers and by providing information on candidates to employers. This paper shows empirical evidence of the second mechanism: social contacts bring job referrals. I use extensive data on social networks and referrals on all directors of large listed US companies between 2004 and 2008. Compared to non-connected new directors, connected new directors are 14% more likely to be referred by current board members with whom they share employment history. Theoretical predictions help discriminating between information provision and favoritism: referrals help select directors with higher ability, in particular the type of ability that is at best only partially observed at the time of hiring.

Suggested Citation

  • Lalanne, Marie, 2025. "Social networks and job referrals in recruitment," Labour Economics, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:labeco:v:97:y:2025:i:c:s0927537125000855
    DOI: 10.1016/j.labeco.2025.102761
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    Cited by:

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    2. Levati, Lorenzo Maria & Lalanne, Marie, 2020. "The impact of job referrals on employment outcomes in top corporate positions," SAFE Working Paper Series 268, Leibniz Institute for Financial Research SAFE.

    More about this item

    Keywords

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    JEL classification:

    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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