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Job recruitment networks and migration to cities in India

Author

Listed:
  • Vegard Iversen

    (School of Development Studies, University of East Anglia, Norwich)

  • Kunal Sen

    (IDPM, University of Manchester)

  • Arjan Verschoor

    (School of Development Studies, University of East Anglia, Norwich)

  • Amaresh Dubey

    (CSRD, Jawaharlal Nehru University, New Delhi`)

Abstract

Economists 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 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.

Suggested Citation

  • Vegard Iversen & Kunal Sen & Arjan Verschoor & Amaresh Dubey, 2009. "Job recruitment networks and migration to cities in India," Discussion Papers 09-01, Indian Statistical Institute, Delhi.
    • Handle: RePEc:alo:isipdp:09-01
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    File URL: http://www.isid.ac.in/~pu/dispapers/dp09-01.pdf
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    References listed on IDEAS

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    Cited by:

    1. Amrita Dhillon & Vegard Iversen & Gaute Torsvik, 2013. "Employee Referral, Social Proximity and Worker Discipline: Theory and Evidence from India," CESifo Working Paper Series 4309, CESifo.
    2. Iversen, Vegard Iversen & Torsvik, Gaute, 2011. "Network mechanisms and social ties in markets for low- and unskilled jobs: (theory and) evidence from North-India," Working Papers in Economics 14/11, University of Bergen, Department of Economics.
    3. Dhillon, Amrita & Iversen, Vegard & Torsvik, Gaute, 2012. "Employee referral, social proximity and worker discipline," CAGE Online Working Paper Series 90, Competitive Advantage in the Global Economy (CAGE).
    4. Amrita Dhillon & Vegard Iversen & Gaute Torsvik, 2021. "Employee Referral, Social Proximity, and Worker Discipline: Theory and Suggestive Evidence from India," Economic Development and Cultural Change, University of Chicago Press, vol. 69(3), pages 1003-1030.
    5. Laura Prota & Melanie Beresford, 2012. "The Factory Hierarchy in the Village: Recruitments Networks and Labour Control in Kong Pisei District of Cambodia," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 4(3), pages 103-122, October.
    6. Mosse, David, 2018. "Caste and development: Contemporary perspectives on a structure of discrimination and advantage," World Development, Elsevier, vol. 110(C), pages 422-436.

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