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Random or Referral Hiring: When Social Connections Matter

  • Nicodemo, Catia

    ()

    (University of Oxford)

  • Nicolini, Rosella

    ()

    (Universitat Autònoma de Barcelona)

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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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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  1. Lídia Farré & Libertad González Luna & Francesc Ortega, 2009. "Immigration, family responsibilities and the labor supply of skilled native women," Economics Working Papers 1161, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Bernt Bratsberg & Oddbjørn Raaum, 2012. "Immigration and Wages: Evidence from Construction," Economic Journal, Royal Economic Society, vol. 122(565), pages 1177-1205, December.
  3. Deepti Goel & Kevin Lang, 2009. "Social Ties and the Job Search of Recent Immigrants," NBER Working Papers 15186, National Bureau of Economic Research, Inc.
  4. Casella, Alessandra & Hanaki, Nobuyuki, 2008. "Information channels in labor markets: On the resilience of referral hiring," Journal of Economic Behavior & Organization, Elsevier, vol. 66(3-4), pages 492-513, June.
  5. Catalina Amuedo-Dorantes & Sara de la Rica, 2008. "Complements or Substitutes? Immigrant and Native Task Specialization in Spain," Working Papers 2008-35, FEDEA.
  6. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2009. "Social Connections and Incentives in the Workplace: Evidence From Personnel Data," Econometrica, Econometric Society, vol. 77(4), pages 1047-1094, 07.
  7. Giovanni Peri & Chad Sparber, 2008. "Task Specialization, Immigration, and Wages," CReAM Discussion Paper Series 0802, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  8. Laura Giuliano & David I. Levine & Jonathan Leonard, 2009. "Manager Race and the Race of New Hires," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 589-631, October.
  9. Kevin Lang & Michael Manove & William T. Dickens, 2005. "Racial Discrimination in Labor Markets with Posted Wage Offers," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-145, Boston University - Department of Economics.
  10. 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.
  11. Olof �slund & Lena Hensvik & Oskar Nordstr�m Skans, 2014. "Seeking Similarity: How Immigrants and Natives Manage in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 32(3), pages 405 - 441.
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