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Random or Referral Hiring: When Social Connections Matter

Author

Listed:
  • Nicodemo, Catia

    (University of Oxford)

  • Nicolini, Rosella

    (Universitat Autònoma de Barcelona)

Abstract
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.

Suggested Citation

  • Nicodemo, Catia & Nicolini, Rosella, 2012. "Random or Referral Hiring: When Social Connections Matter," IZA Discussion Papers 6312, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6312
    as

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    File URL: https://docs.iza.org/dp6312.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Sari Pekkala Kerr & William R. Kerr, 2021. "Whose Job Is It Anyway? Coethnic Hiring in New US Ventures," Journal of Human Capital, University of Chicago Press, vol. 15(1), pages 86-127.

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    More about this item

    Keywords

    ethnicity; hiring strategies; social networks;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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