Information, Mobile Communication Patterns and Social Referrals (joint with Panle Jia Barwick)

Abstract:
Tracking daily movements of more than 3 million individuals in one major Chinese city over one year using wireless voice calls, text messages, and data usage, we relate social ties and jobs to worker mobility patterns. Consistent with the literature, we find that one out of four jobs are based on referrals. Referral information is more effective for young workers, people switching jobs from outside the city to the inner city, and those who change industrial sector. The referral effect is stronger for females and migrants. Referred jobs are associated with higher wages, a higher likelihood to transition from part-time to full-time and reduced commuting time, suggesting higher amenity benefits. Firms receiving referrals are more likely to have successful recruits, higher retention rates, and faster growth. Our analysis suggests that referrals improve labor market efficiency by providing better matches between workers and vacancies, and labor market inequality by allowing groups traditionally discriminated against to enter in better jobs.