Job Market Signalling Via Social Ties

Speaker: Shahir Safi

Affiliation: Concordia University

Online via Zoom: https://uqz.zoom.us/j/84030975989

Abstract 

When there is asymmetric information about abilities of applicants, employees can “signal”—recommendation letter or put in a good word—some of this information to firms by recommending applicants they personally know. I consider how employees strategically transmit information to firms when there are both gratitude benefits for recommendations and reputation costs for providing inaccurate information. Unlike the classic setting of job market signalling by applicants, senders (employees) can now have imperfect information about abilities and my analysis builds upon this feature. I then develop two applications of this model which consider the strategic “selections” of ties and hiring channels by applicants. This allows me to help explain mixed evidence about the returns to using different types of ties (weak vs strong) and hiring channels (formal market vs social tie), as well as the relatively higher use of social ties by low skill/ability applicants.

About the presenter's meeting

 Shahir is visiting Monash University, but he will visit us via zoom only. If you would like to meet him on Tuesday 27 or in the afternoon of Wednesday 28, please contact Dr Carlos Oyarzun.