This paper develops a labour market matching model with heterogeneous firms, on-thejob search and referrals. Social … positive effect of referrals on reservation wages. At the same time, employees accept job offers from more productive employers … lower than the average productivity in the market. This is a negative selection effect of referrals on wages. In the …

. Our point of departure is the Montgomery (1991) model of employee referrals which suggests that it is optimal for firms to … hire new workers through referrals from their most productive existing employees, as these employees are more likely to … that firms use referrals of productive employees in order to attract workers with better qualities in dimensions that would …

This paper examines wage dispersion and wage dynamics in a stock-flow matching economy with on-the-job search. Under … stock-flow matching, job seekers immediately become fully informed about the stock of viable vacancies. If only one option … ; stock-flow matching …