Job Recruitment Networks and Migration to Cities in India
AbstractEconomists have focused on job search and supply-side explanations for network effects in labour transactions. This paper develops and tests an alternative explanation for the high prevalence of network-based labour market entry in developing countries. In our theoretical framework, employers use employee networks as screening and incentive mechanisms to improve the quality of recruitment. Our framework suggests a negative relationship between network use and the skill intensity of jobs, a positive association between economic activity and network use and a negative relationship between network use and pro-labour legislation. Furthermore, social identity effects are expected to intensify when compared to information-sharing and other network mechanisms. Using data from an all-India Employment Survey, we implement a novel empirical strategy to test these relationships and find support for our demand-side explanation.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Journal of Development Studies.
Volume (Year): 45 (2009)
Issue (Month): 4 ()
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Other versions of this item:
- Vegard Iversen & Kunal Sen & Arjan Verschoor & Amaresh Dubey, 2009. "Job recruitment networks and migration to cities in India," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 09-01, Indian Statistical Institute, New Delhi, India.
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