"Social connections and referrals are ubiquitous in the labour market, both on the job-seeker side and on the employer side. This article reviews recent developments in the study of referrals, highlighting what we have learned regarding the use and impact of referrals on various labour market outcomes and pointing out the increasingly nuanced picture we are gaining on the effects of referrals. It then discusses directions for future research, emphasizing the importance of using newly available data (and combinations of datasets) and of making tighter connections with the burgeoning macro-labour research that is based on a search and matching framework. Finally, it evaluates the role of referrals from the point of view of policy-makers, discussing their social welfare implications and ways in which they could be explicitly incorporated into various labour market policies. The importance of tighter collaboration between policy-makers, researchers, employers and practitioners is stressed, to conduct more rigorous experimentation and evaluation of potential referral-based policies and programmes."

Support: Digital