Research Interests : Macro Labor - Search and Matching, Networks and Inequality
Research Interests : Macro Labor - Search and Matching, Networks and Inequality
Papers
"The Cyclical Behavior of a Firm's Optimal Market and Referral Hiring (PDF)
Abstract: Referral hiring has a lower applicant arrival rate. Still, it has a higher arrival rate of potentially `good-fit' job applicants and is less costly to hire than market hiring. These trade-offs are key drivers of a firm's steady-state and stochastic-optimal hiring decisions. This paper builds and calibrates a stochastic search-and-matching model to analyze the cyclical behavior of optimal market and referral hiring in response to shocks to labor productivity. The model replicates the qualitative cyclical behavior of optimal market and referral hiring observed in the U.S. data: a firm increases its market hiring rate and decreases its referral hiring rate during a recession. Moreover, the model explains $64\%$ more variation in cyclical optimal referral hiring rates than in cyclical optimal market hiring rates.
"Market vs Referral Hiring: Implications on Welfare, Aggregate Match Quality and Wage Inequality (draft undergoing changes )
Abstract: Empirical evidence from the Survey of Consumer Expectations (SCE) suggests that, in the U.S., between 2013 and 2021, on average, about 50\% of workers were hired by a firm through employee referrals and the market channel during a given survey year. This paper builds and calibrates a deterministic Diamond-Mortensen-Pissarides (DMP) search and matching model to study what governs a firm’s optimal market and referral hiring decisions. At the calibrated steady state, I find, relative to the referral, the market channel has a higher matching rate, is associated with a higher hiring cost, but has a lower probability of the match being good. This quantity-quality-cost tradeoff characterizes a firm’s optimal hiring decisions. Furthermore, the model is simulated to show that the market hiring rate decreases and the referral hiring rate increases with labor productivity, implying higher aggregate match quality and lower job less-job mover expected wage gap. Regarding the policy implications of the model, higher unemployment benefits decrease vacancy postings, which in turn increase the unemployment rate, reduce market tightness, encourage market hiring, and discourage referral hiring.
Work in Progress
"A Dynamic Model of a Firm's Market and Referral Hiring"
"Optimal Unemployment Insurance and Firm's Market & Referral Hiring "