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Who Gets Hired? The Strength of Weak Ties and the Signaling of Strong Ties
This paper presents a model of referrals in which strong ties serve as a signaling mechanism, allowing employees to convey private information about referred workers. Matching occurs through three channels: strong ties (partially informative), weak ties (uninformative but frictionless), and formal screening in the market (fully informative but frictional). Low-skill workers use weak ties to avoid revealing their type, helping reconcile two stylized facts: Granovetter1973‘s strength of weak ties and the prevalence of referrals in low-skill jobs. The model also reveals a complementarity between weak and strong ties: conditional on having a strong-tie offer, returns to weak ties are positive and increasing in worker skill.
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