Abstract
Current research on network-based job matching in transition economies makes conflicting predictions: some scholarship suggests that as formal market intermediaries develop, network matching declines, while another – that it increases because employers’ use of network hiring becomes more common. To reconcile these contradictory predictions, we change perspectives relative to most labor market network scholarship and examine referrer behavior. Referrers are those who share information about job opportunities with potential job candidates. We propose that the market transition increases demand-side network matching, or network matching where referrers act on behalf of their employer, but decreases supply-side network matching, or matching where referrers act on behalf of their job-seeking contacts. Using a large-scale population survey, we show that in China, referring increases when employers seek or encourage network hiring. Net of these employer effects, greater provincial market development is associated with lower referring.
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