Do employers learn more from referrals than from other recruitment channels?

Gürtzgen, Nicole and Pohlan, Laura (2024) Do employers learn more from referrals than from other recruitment channels? LABOUR ECONOMICS, 89: 102574. ISSN 0927-5371, 1879-1034

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Abstract

We study whether referrals deliver better information about the productivity of new hires than other recruiting channels. Using combined vacancy-register data, we document that referrals are associated with less screening and lower search costs. We demonstrate that the referral wage premium is informative on referrals' information advantage only if differences in screening are accounted for. Consistent with the predictions from a learning model, referrals increase new hires' job stability and wages, with the effects diminishing over time. Results suggest that the referral information advantage is particularly pronounced for males and when employers use referrals as the only search channel.

Item Type: Article
Uncontrolled Keywords: Matching; Referral based hiring; Information frictions; Recruiting channels
Subjects: 300 Social sciences > 330 Economics
Divisions: Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie > Lehrstuhl für Arbeitsmarktforschung (Professor Dr. Nicole Gürtzgen)
Depositing User: Dr. Gernot Deinzer
Date Deposited: 09 Dec 2025 07:12
Last Modified: 09 Dec 2025 07:12
URI: https://pred.uni-regensburg.de/id/eprint/64390

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