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Referral and Job Performance: Evidence from the Ghana Colonial Army

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  • Fafchamps, Marcel
  • Moradi, Alexander

Abstract

As formalized by Montgomery (1991), referral by employees improves efficiency if the unobserved quality of a new worker is higher than that of unrefereed workers. Using data compiled from army archives, we test whether the referral system in use in the British colonial army in Ghana served to improve the unobserved quality of new recruits. We find that it did not: referred recruits were more likely than unreferred recruits to desert or be dismissed as 'inefficient' or 'unfit'. We find instead evidence of referee opportunism. The fact that referred recruits have better observed characteristics at the time of recruitment suggests that army recruiters may have been aware of this problem.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7408.

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Date of creation: Aug 2009
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Handle: RePEc:cpr:ceprdp:7408

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Keywords: employee referral; hidden attributes; worker productivity;

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References

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Cited by:
  1. Berardi, N., 2013. "Social networks and wages in Senegal’s formal sector," Working papers 429, Banque de France.
  2. Becker, Sascha O & Egger, Peter H & Von Ehrlich, Maximilian, 2012. "Absorptive Capacity and the Growth and Investment Effects of Regional Transfers: Regression Discontinuity Design with Heterogeneous Treatment Effects," CAGE Online Working Paper Series 89, Competitive Advantage in the Global Economy (CAGE).
  3. Caria, Antonia Stefano & Hassen, Ibrahim Worku, 2013. "The formation of job referral networks: Experimental evidence from ubran Ethiopia:," IFPRI discussion papers 1282, International Food Policy Research Institute (IFPRI).

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