Peer effects in employment: results from Mexico's poor rural communities
AbstractEmpirical evidence has shown that off-farm non-agricultural (OFNA) employment offers a major pathway from poverty for rural populations. However, the pattern of participation in these activities is heterogeneous across categories of individuals and poorly understood. We explore the role of spillovers from peers on an individualÃ¢â¬â¢s participation in formal and informal OFNA employment using village census data for rural Mexico. We test and reject the possibility that peersÃ¢â¬â¢ decisions could be proxying for unobserved individual, village-level, or individual-type effects. We find that peersÃ¢â¬â¢ participation in OFNA employment has a large impact on an individualÃ¢â¬â¢s ability to engage in this type of employment, both formal and informal, even after controlling for individual attributes and village characteristics. Peer effects are structured by similarities in gender, ethnicity, educational level, and land endowment. We find that marginal peer effects tend to be stronger for categories of individuals that are already more engaged in OFNA employment, such as men, non-indigenous people, the more educated, and the landless, contributing to reinforcing inequalities in accessing these jobs. However, the role of peer effects relative to that of education in obtaining formal OFNA employment is more important for members of groups that are less engaged in these jobs, such as women, indigenous people, the less educated, and smallholders.
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Bibliographic InfoPaper provided by University of California at Berkeley, Department of Agricultural and Resource Economics and Policy in its series CUDARE Working Paper Series with number 0991.
Length: 26 pages
Date of creation: 2004
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Postal: University of California, Giannini Foundation of Agricultural Economics Library, 248 Giannini Hall #3310, Berkeley CA 94720-3310
Other versions of this item:
- Araujo, Caridad & de Janvry, Alain & Sadoulet, Elisabeth, 2004. "Peer Effects in Employment: Results from Mexico's Poor Rural Communities," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt977093fg, Department of Agricultural & Resource Economics, UC Berkeley.
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