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Referral and Job Performance: Evidence from the Ghana Colonial Army

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  • Marcel Fafchamps
  • Alexander Moradi

Abstract

Employee referral is often thought to exist because it conveys positive information about unobserved worker quality or helps in monitoring workers. Using data compiled from army archives, we test whether the referral system in use in the British colonial army in Ghana is associated with higher quality or effort of new recruits. We find that it was not: referred recruits were more likely than unreferred recruits to desert or be dismissed as "inefficient" or "unfit" or for "misconduct." 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 and sought to compensate for lower-than-average unobserved quality.

Suggested Citation

  • Marcel Fafchamps & Alexander Moradi, 2015. "Referral and Job Performance: Evidence from the Ghana Colonial Army," Economic Development and Cultural Change, University of Chicago Press, vol. 63(4), pages 715-751.
  • Handle: RePEc:ucp:ecdecc:doi:10.1086/681276
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    References listed on IDEAS

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    Cited by:

    1. Martin Abel & Rulof Burger & Patrizio Piraino, 2017. "The value of reference letters," Working Papers 06/2017, Stellenbosch University, Department of Economics.
    2. 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).
    3. repec:dse:indecr:0095 is not listed on IDEAS
    4. Nicoletta Berardi, 2013. "Social networks and wages in Senegal’s labor market," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-26, December.
    5. Afridi, Farzana & Dhillon, Amrita & Sharma, Swati, 2015. "Social Networks and Labour Productivity: A Survey of Recent Theory and Evidence," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 50(1), pages 25-42.
    6. Andre Hofmeyr, 2010. "Social Networks And Ethnic Niches: An Econometric Analysis Of The Manufacturing Sector In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 78(1), pages 107-130, March.

    More about this item

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • N47 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Africa; Oceania
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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