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The ties that bind us: Social networks and productivity in the factory

Author

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  • Afridi, Farzana
  • Dhillon, Amrita
  • Sharma, Swati

Abstract

We use high frequency worker level productivity data from garment manufacturing units in India to study the effects of caste-based social networks on individual and group productivity when workers are complements in the production function. Using plausibly exogenous variation in the production lines' caste composition for almost 35,000 worker-days, we find that a 1 percentage point (pp) increase in the share of own caste workers in the line increases daily individual productivity by at least 0.09 pp. The least efficient worker's productivity, however, rises by almost 0.17 pp when the caste composition of the line becomes more homogeneous by 1 pp. These results are robust to unobservable heterogeneity in worker ability and line level trends. Production externalities, that induce greater effort through within-network peer effects, can potentially explain our findings.

Suggested Citation

  • Afridi, Farzana & Dhillon, Amrita & Sharma, Swati, 2024. "The ties that bind us: Social networks and productivity in the factory," Journal of Economic Behavior & Organization, Elsevier, vol. 218(C), pages 470-485.
    • Handle: RePEc:eee:jeborg:v:218:y:2024:i:c:p:470-485
    DOI: 10.1016/j.jebo.2023.12.026
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    More about this item

    Keywords

    Caste; Social networks; Labor productivity; Assembly lines; Garment factory;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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