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 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 InfoPaper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 09-01.
Length: 36 pages
Date of creation: Jan 2009
Date of revision:
Other versions of this item:
- Vegard Iversen & Kunal Sen & Arjan Verschoor & Amaresh Dubey, 2009. "Job Recruitment Networks and Migration to Cities in India," Journal of Development Studies, Taylor & Francis Journals, vol. 45(4), pages 522-543.
- NEP-ALL-2010-02-20 (All new papers)
- NEP-CWA-2010-02-20 (Central & Western Asia)
- NEP-LAB-2010-02-20 (Labour Economics)
- NEP-MIG-2010-02-20 (Economics of Human Migration)
- NEP-SOC-2010-02-20 (Social Norms & Social Capital)
- NEP-URE-2010-02-20 (Urban & Real Estate Economics)
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