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Do Recruitment Ties Affect Wages? An Analysis using Matched Employer–Employee Data from Vietnam

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  • Anna Folke Larsen
  • John Rand
  • Nina Torm

Abstract

This paper examines the extent to which recruitment ties affect individual wage outcomes in small and medium scale manufacturing firms. Based on a unique matched employer-employee dataset from Vietnam we find that there is a significant positive wage premium associated with obtaining a job through an informal contact, when controlling for standard determinants of wage compensation. Moreover, we show that the mechanism through which informal contacts affect wages depends on the type of recruitment tie used. The findings are robust across location, firm size categories and different worker types.
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Suggested Citation

  • Anna Folke Larsen & John Rand & Nina Torm, 2011. "Do Recruitment Ties Affect Wages? An Analysis using Matched Employer–Employee Data from Vietnam," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 541-555, August.
  • Handle: RePEc:bla:rdevec:v:15:y:2011:i:3:p:541-555 DOI: j.1467-9361.2011.00626.x
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    File URL: http://hdl.handle.net/10.1111/j.1467-9361.2011.00626.x
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    References listed on IDEAS

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    1. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710 Elsevier.
    2. Soderbom, Mans & Teal, Francis & Wambugu, Anthony, 2005. "Unobserved heterogeneity and the relation between earnings and firm size: evidence from two developing countries," Economics Letters, Elsevier, vol. 87(2), pages 153-159, May.
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    Citations

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    Cited by:

    1. Vinod Mishra & Russell Smyth, 2012. "Returns to Schooling in Urban China: New Evidence Using Heteroskedasticity Restrictions to Obtain Identification Without Exclusion Restrictions," Monash Economics Working Papers 33-12, Monash University, Department of Economics.
    2. Vu, Van Huong, 2012. "Does export participation affect wages and employment quality? the case of Vietnamese SMEs," MPRA Paper 38696, University Library of Munich, Germany.
    3. repec:eee:wdevel:v:97:y:2017:i:c:p:79-101 is not listed on IDEAS
    4. Amadou Boly, 2015. "On the benefits of formalization: Panel evidence from Vietnam," WIDER Working Paper Series 038, World Institute for Development Economic Research (UNU-WIDER).
    5. Benedikter, Simon & Waibel, Gabi & Birtel, Serge & Bui, Cuong The & Tran, Be Thanh, 2013. "Local Entrepreneurship in Vietnam’s Rural Transformation. A Case Study from the Mekong Delta," MPRA Paper 49866, University Library of Munich, Germany.
    6. Rand, John & Torm, Nina, 2012. "The Benefits of Formalization: Evidence from Vietnamese Manufacturing SMEs," World Development, Elsevier, vol. 40(5), pages 983-998.
    7. Boly Amadou, 2015. "On the Effects of Formalization on Taxes and Wages: Panel Evidence from Vietnam," WIDER Working Paper Series 042, World Institute for Development Economic Research (UNU-WIDER).
    8. Benedikte Bjerge & Nina Torm & Neda Trifkovic, 2016. "Gender matters: Private sector training in Vietnamese SMEs," WIDER Working Paper Series 149, World Institute for Development Economic Research (UNU-WIDER).
    9. Huong Vu & Steven Lim & Mark Holmes & Tinh Doan, 2013. "Firm Exporting and Employee Benefits: First Evidence from Vietnam Manufacturing SMEs," Economics Bulletin, AccessEcon, pages 519-535.
    10. Trifkovic Neda, 2015. "Spillover Effects of International Standards: Work Conditions in Vietnamese Small and Medium Enterprises," WIDER Working Paper Series 047, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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