Conrad Miller will be presenting in person, and via Zoom.
Conrad Miller is an Assistant Professor at Berkeley Haas and a Faculty Research Fellow at the National Bureau of Economic Research. Conrad’s research areas include labor economics, worker-firm matching, and discrimination.
Does referral hiring exacerbate racial inequality in firm-level labor demand? We argue that the answer depends on where a firm is in its life cycle. We consider a search model where referral networks are segregated, firms are more informed about the match quality of referred candidates, and some referrals are made by non-referred employees. While early referral hires are disproportionately drawn from the founder’s racial group, in steady state referral hiring does not favor any group relative to hiring from the external market. We test the model using data from Brazil. Consistent with the model, we find that firms are more likely to hire candidates and less likely to dismiss employees of the same race as the founder, but these differences disappear as firms’ cumulative hires increase. Given racial disparities in entrepreneurship, referral hiring helps to explain racial differences in dismissals, seniority, and employer size.