prevalence of social networks in job search there is as yet no consensus on the mechanisms for why referrals are so important: an … literature has documented network effects on labour productivity - mostly when there are no externalities between workers. The …

In this paper we highlight a specific mechanism through which social networks help in job search. We characterize the … strength of a network by its likelihood of providing a job offer. Using a theoretical model we show that the wage differential … in jobs found using networks versus those found using formal channels, decreases as the network becomes stronger. We …