【研讨会】An Equilibrium Labor Market Model with Internal and External Referrals
【Abstract】More than one-third of workers find their jobs through friends, relatives and acquaintances. Based on Job Search Survey, we show that the jobs found through informal methods pay more (less), compared to the ones found through formal methods, if the informant knows someone (does not know anyone) at the firm. In order to account for this new observation, a new mechanism is introduced into the classical Burdett and Mortensen (1998) on-the-job search model, through which workers can share job openings information with each other. In equilibrium, the distribution of wages offered is non-degenerate. The model, when calibrated to the monthly U.S. labor market data, is able to account for the percentage of jobs through informal methods, and a large part of the corresponding effects on wages. By introducing informal methods, the model's ability to account for the observed wage dispersion also improves substantially. Restricting informal methods would make both unemployed and employed workers worse off. Furthermore, the current unemployment insurance system increases the percentage of unemployed workers hired through informal methods, and reduces the wage differential between the jobs found through formal and informal methods.