I build a model of employee referrals with two main features: unemployed workers choose which employed workers to ask for referrals based on the type of ties (weak or strong) they have with them, and firms try to infer some information about the abilities of the unemployed workers through the recommendations of its employees. The model predicts that the returns to using a tie vary with the unemployed worker’s ability, the tie strength, and the proportion of workers who have access to different types of ties. I then develop two applications of this model. (1) There is significant evidence suggesting that the black-white wage gap widens as one moves up the wage hierarchies of the private sector in the US. The model shows that the lack of access to strong ties for blacks can be behind this empirical finding. (2) In the second application, I explore some implications of the employee referrals for job search. The model can explain (i) the mixed evidence about the use of different types of ties in job search, and (ii) the mixed evidence about the wage differentials between workers who found jobs through referrals and workers who found jobs by formally applying to firms.