Abstract
Personal connections are an important search and matching channel across different labor markets, formal and informal, in both high- and low-income settings (Topa, 2011; Burks et al., 2015). Despite improving matching efficiency, the system of employee referral risks penalizing minority groups and reinforcing labor market segregation. In informal labor markets, where networks are key for landing a job through referrals, biases among employees, and not only firm owners or HR departments, act as an additional barrier to gender equality in access to certain occupations (Beaman et al., 2018). Employees tend to refer network members with similar characteristics, including gender (Brown et al., 2016). In particular, women are less likely to use informal contacts than men, their contacts tend to be more clustered in certain occupations, and, for them, similar levels of network usage yield lower wages and promotion chances than for men (Topa, 2011). This project is an extension of two previously registered project (AEARCTR-0008036 and AEARCTR-0011599) to examine the extent of gender bias perpetuated by employees through the referral system. As in the original project, we present employees of businesses operating in highly segregated occupations with profiles of potential candidates to investigate their gender preferences as well as how these preferences interplay with personal connection to the candidate. Also here, we also assess whether information shocks and changes in confidentiality can change the referring preferences of employees over candidates.
In this project, we keep the additions made in AEARCTR-0011599 to AEARCTR-0008036, namely: (1) we have 4 main treatment arms rather than 2, (2) we improve the framing of the confidentiality, (3) we introduce vignette experiments to understand the mechanisms, and (4) we improve the construction of the profiles shown to respondents. In addition to it (and lacking in AEARCTR-0011599), we also: (5) introduce two new treatment arms for confidentiality, (6) add new questions on gender of the employer, gender composition of the business, and perceived gender attitudes of the employer (that we will use as relevant sources of heterogeneity), (7) add new outcome variables on (7.a) employees’ second-order beliefs of employers’ rating of the profile, (7.b) employees’ second-order beliefs of coworkers’ rating of the profile, (7.c) employees’ perceived accuracy of their guess of retention probability of the profile, and (7.d) employees’ perception on the ability of the profile performing usual tasks at their job. We also (8) introduce a new source of exogenous variation by changing whether we ask second-order beliefs of employers’ ratings before or after the referral decision. In this experiment, we also (9) make respondents believe that the profiles that we show are truthful, setting us halfway between the general IRR framework of presenting profiles as hypothetical (done in AEARCTR-0011599 and AEARCTR-0008036) and traditional audit studies. This is done to avoid the issue of making respondents guess which parts of the profile are hypothetical and which are not.