We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
AN EQUILIBRIUM LABOR MARKET MODEL WITH INTERNAL AND EXTERNAL REFERRALS.
- Authors
Lang, Youze; Yang, Youzhi
- Abstract
About 40% of workers find their jobs through referrals. We distinguish between two types of referrals based on whether the referrer works at the hiring firm (internal referrals) or not (external referrals). Interestingly, jobs found through internal (external) referrals pay more (less) than those found through formal methods. An equilibrium labor market model is then built by introducing an incentive‐compatible mechanism through which workers can share job opening information. A nondegenerate wage distribution arises in equilibrium with a wage premium (penalty) for internal (external) referrals. When calibrated, our model can capture these salient features of the U.S. labor market.
- Subjects
LABOR market; MARKET equilibrium; INTERNAL marketing; EMPLOYMENT references
- Publication
International Economic Review, 2024, Vol 65, Issue 2, p655
- ISSN
0020-6598
- Publication type
Article
- DOI
10.1111/iere.12671