On the one hand, in expansions it is relatively easier for workers to find jobs, so they rely less strongly on their social networks, which means that hiring through referrals should be less frequent in expansions. On the other hand, firms have difficulties to fill their open positions in...

In this study we evaluate the effects of low-skilled immigration on small businesses, wages and employment in Germany. We develop a search and matching model with heterogeneous workers, cross-skill matching, and endogenous entry into entrepreneurship. The model is calibrated using German...

We study the effect of finding a job through one's social contact on starting wages. Using combined SOEP-INKAR data for Germany and propensity score analysis - both matching and weighting - we document that referral hiring is associated with a wage penalty of 10%. This penalty is stable over...