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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. Åslund, Olof & Hensvik, Lena & Nordström Skans, Oskar, 2009. "Seeking similarity: how immigrants and natives manage at the labor market," Working Paper Series 2009:24, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. Giovanni Peri & Chad Sparber, 2008. "Task Specialisation, Immigration and Wages," Development Working Papers 252, Centro Studi Luca d\'Agliano, University of Milano.
  3. Bandiera, Oriana & Barankay, Iwan & Rasul, Imran, 2008. "Social Connections and Incentives in the Workplace: Evidence from Personnel Data," IZA Discussion Papers 3917, Institute for the Study of Labor (IZA).
  4. Giuliano, Laura & Levine, David I. & Leonard, Jonathan, 2006. "Manager Race and the Race of New Hires," Institute for Research on Labor and Employment, Working Paper Series qt2cb2q1h1, Institute of Industrial Relations, UC Berkeley.
  5. Francesc Ortega & Libertad González & Lídia Farré Olalla, 2009. "Immigration, family responsibilities and the labor supply of skilled native women," Working Papers. Serie AD 2009-19, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  6. Bernt Bratsberg & Oddbjorn Raaum, 2010. "Immigration and Wages: Evidence from Construction," CReAM Discussion Paper Series 1006, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  7. 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.
  8. 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.
  9. Deepti Goel & Kevin Lang, 2010. "Social Ties and the Job Search of Recent Immigrants," CReAM Discussion Paper Series 1022, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  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. Catalina Amuedo-Dorantes & Sara de la Rica, 2008. "Complements or Substitutes? Immigrant and Native Task Specialization in Spain," CReAM Discussion Paper Series 0816, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  12. repec:clu:wpaper:0506-05 is not listed on IDEAS
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