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Referral Hiring of Miners: Case from the Coal Industry in Early Twentieth Century Japan

Listed author(s):
  • Sakai, Mayo


    (Graduate School of Economics, The University of Tokyo)

Referral hiring is a practical solution to the problem of adverse selection in the labor market and, as a result, is attracting increasing interest from economic researchers. This study argues that firms use referral hiring when workers f skills are too specialized for employees in the human resources division to decide on a right candidate. In the 1900s, coal mining firms used referral hiring to screen workers. We focus on the recruitment of miners and study the experience of a coal mine in the 1900s, analyzing employment contracts. Our theoretical predictions argue that workers with traditional manual skills were hired using referral hiring and unskilled workers and workers with modernized skills were hired directly by firms, not using referral hiring. Our empirical analysis is consistent with the predictions.

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Paper provided by Institute of Social Science, The University of Tokyo in its series ISS Discussion Paper Series (series F) with number f164.

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Date of creation: 30 Oct 2013
Date of revision: 26 Apr 2017
Handle: RePEc:itk:issdps:f164
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  1. Lori Beaman & Jeremy Magruder, 2012. "Who Gets the Job Referral? Evidence from a Social Networks Experiment," American Economic Review, American Economic Association, vol. 102(7), pages 3574-3593, December.
  2. Valery Yakubovich & Daniela Lup, 2006. "Stages of the Recruitment Process and the Referrer’s Performance Effect," Organization Science, INFORMS, vol. 17(6), pages 710-723, December.
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