This paper introduces an equilibrium model with firms that are heterogeneous in their productivity and analyzes their incentives for hiring through referrals or through the market. This analysis is motivated by the observation that referrals account for a larger share of hires at firms that are...

When firms choose the allocation of workers, they can adjust not only the type of worker, the extensive margin, but also the intensive margin, how many of those worker to employ. We propose a tractable matching model with such factor intensity. Positive sorting arises under...