Hiring through Referrals

Employee referrals are a very common means by which firms hire new workers. Past work suggests that workers hired via referrals often perform better than non-referred workers, but we have little understanding why this may be. In this paper, we demonstrate this is because referrals allow firms to select workers better-suited for particular jobs. To test our model, we use novel and detailed productivity and survey data from nine large firms in three industries: call-centers, trucking, and high-tech. Referred workers are 10-30% less likely to quit and have substantially higher performance on rare "high-impact metrics" (e.g. creating patents and avoiding work accidents), despite having similar characteristics and similar performance on non-rare metrics. To identify the source of these behavioral differences, we develop four new statistical tests, all of which indicate that referrals benefit firms primarily by selecting workers with a better fit for the job, as opposed to referrals selecting workers with higher overall quality; to referrals enabling monitoring or coaching; or to it being more enjoyable to work with friends. We document that workers refer others like themselves, not only in characteristics but in behavior (e.g. unsafe workers refer other unsafe workers), suggesting that firms may gain by incentivizing referrals most from their highest quality workers. Referred workers achieve substantially higher profits per worker and the difference is entirely driven by referrals from high productivity workers.

That practically changed my mind on the subject. The paper, "The Value of Hiring through Referrals," is by Burks et al. (April 2013).  

HIV Status and Labor Market Participation (South Africa)

We find that being HIV-positive is associated with a seven percentage point increase in the likelihood of being unemployed. South Africans with less than a high school education are close to 11 percentage points more likely to be unemployed if they are HIV-positive. HIV status confers a disadvantage despite high unemployment rates, and reinforces existing inequalities in South Africa.

From the paper "HIV Status and Labor Market Participation in South Africa" by Levinsohn et al., forthcoming in the The Review of Economics and Statistics. A 2009-draft is here. 

That a woman can do, a man can do

An analysis of census data by The New York Times shows that from 2000 to 2010, occupations that are more than 70 percent female accounted for almost a third of all job growth for men, double the share of the previous decade.

Source.  

Why are artists so happy in spite of higher unemployment, lower wages, etc., etc?

The artistic labor market is marked by several adversities, such as low wages, above-average unemployment, and constrained underemployment. Nevertheless, it attracts many young people. The number of students exceeds the available jobs by far. A potential explanation for this puzzle is that artistic work might result in excep- tionally high job satisfaction, a conjecture that has been mentioned at various times in the literature. We conduct the first direct empirical investigation of artists’ job satisfaction. The analysis is based on panel data from the German Socio-Economic Panel Survey (SOEP). Artists on average are found to be considerably more satisfied with their work than non-artists, a finding that corroborates the conjectures in the literature. Differences in income, working hours, and personality cannot account for the observed difference in job satisfaction. Partially, but not fully, the higher job satisfaction can be attributed to the higher self-employment rate among artists. Suggestive evidence is found that superior “procedural” characteristics of artistic work, such as increased variety and on-the-job learning, contribute to the difference in job satisfaction.

This is one of the several interesting graphs in the paper:

 

That is from a new paper by Lasse Steiner and Lucian Schneider. A link to a link to the paper is here.  

Freelancing -- the rise of the liquid Economy

By necessity or by choice this is defining the new job-paradigm in the US – Economy:

Everywhere we look, we can see the U.S. workforce undergoing a massive change. No longer do we work at the same company for 25 years, waiting for the gold watch, expecting the benefits and security that come with full-time employment. We’re no longer simply lawyers, or photographers, or writers. Instead, we’re part-time lawyers-cum- amateur photographers who write on the side.

Economies are so interconnected these days that changes in the job-market in the US immediately modify job patterns at least in the formal economies of developing countries.