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Human Capital Transferability and Information Spillovers: A Tractable Framework

Author

Listed:
  • Theodore Papageorgiou

    (McGill University)

  • Rafael Lopes de Melo

    (University of Chicago)

Abstract

This is the first paper to directly provide an estimate of the degree of information that is transferred through a referral. Several studies have shown that almost half of existing jobs were found through the use of referrals. The literature has suggested that referrals a) overcome search frictions and b) provide information about worker's unobserved skills. While there is ample evidence for the former, the latter proposition remains understudied. We use the empirical methods developed in Altonji and Pierret (2001) and Lange (2007) to exploit panel data on wages, experience, tenure and skills to gauge how uncertain employers are about referred job applicants and how rapidly this uncertainty is resolved.

Suggested Citation

  • Theodore Papageorgiou & Rafael Lopes de Melo, 2015. "Human Capital Transferability and Information Spillovers: A Tractable Framework," 2015 Meeting Papers 1258, Society for Economic Dynamics.
    • Handle: RePEc:red:sed015:1258
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