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Personal Networks and Nonagricultural Employment: The Case of a Farming Village in the Philippines

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  • Kei Kajisa

Abstract

This article, based on an intensive village survey in the Philippines, analyzes the effects of personal networks on rural villagers’ access to nonagricultural occupations and the terms of employment given to them. A key finding is that personal networks are selectively used to reduce transaction costs and their impacts on employment conditions vary by size and by location of enterprises. We find that when villagers are employed in unskilled work at small enterprises, those who use family/relative networks receive wage premiums. However, if we limit our sample to small enterprises located near our study village, the family/relative network premiums become insignificant, presumably because of the overriding influence of the community-wide network within a narrow local community. Contrary to the case of small enterprises, unskilled workers’ wages at large enterprises are not much affected by personal networks but are largely determined by years of schooling and work experience. The recent development of large-scale enterprises in the Philippines shows the diminishing importance of personal networks for unskilled labor markets, reflecting the tendency that acquired ability through education and training is becoming more important than nascent characteristics such as family/relative networks, corresponding to economic and social modernization.

Suggested Citation

  • Kei Kajisa, 2007. "Personal Networks and Nonagricultural Employment: The Case of a Farming Village in the Philippines," Economic Development and Cultural Change, University of Chicago Press, vol. 55, pages 669-707.
  • Handle: RePEc:ucp:ecdecc:v:55:y:2007:p:669-707 DOI: 10.1086/516766
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    1. Dufhues, Thomas & Buchenrieder, Gertrud & Quoc, Hoang Dinh & Munkung, Nuchanata, 2011. "Social capital and loan repayment performance in Southeast Asia," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 679-691.
    2. Muto, Megumi, 2009. "The impacts of mobile phone coverage expansion and personal networks on migration: evidence from Uganda," 2009 Conference, August 16-22, 2009, Beijing, China 51898, International Association of Agricultural Economists.
    3. Babur Wasim Arif & Tetsushi Sonobe, 2012. "Virtual Incubation in Industrial Clusters: A Case Study in Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 48(3), pages 377-392, March.
    4. Dufhues, Thomas & Buchenrieder, Gertrud & Munkung, Nuchanata, 2012. "Individual social capital and access to formal credit in Thailand," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 123401, International Association of Agricultural Economists.
    5. Mano, Yukichi & Yamano, Takashi & Suzuki, Aya & Matsumoto, Tomoya, 2011. "Local and Personal Networks in Employment and the Development of Labor Markets: Evidence from the Cut Flower Industry in Ethiopia," World Development, Elsevier, vol. 39(10), pages 1760-1770.
    6. de Lange, Deborah E., 2016. "Legitimation Strategies for Clean Technology Entrepreneurs Facing Institutional Voids in Emerging Economies," Journal of International Management, Elsevier, vol. 22(4), pages 403-415.
    7. Keijiro Otsuka & Jonna P. Estudillo & Takashi Yamano, 2010. "The Role of Labor Markets and Human Capital in Poverty Reduction: Evidence from Asia and Africa," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 7(1), pages 23-40, June.
    8. Dhillon, Amrita & Iversen, Vegard & Torsvik, Gaute, 2013. "Employee Referral, Social Proximity And Worker Discipline: Theory And Evidence From India," Working Papers in Economics 04/13, University of Bergen, Department of Economics.
    9. Hideaki Goto & Yukichi Mano, 2012. "Labor market competitiveness and the size of the informal sector," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 495-509, January.
    10. Hoang, Trung X. & Pham, Cong S. & Ulubaşoğlu, Mehmet A., 2014. "Non-Farm Activity, Household Expenditure, and Poverty Reduction in Rural Vietnam: 2002–2008," World Development, Elsevier, vol. 64(C), pages 554-568.
    11. Dhillon, Amrita & Iversen, Vegard & Torsvik, Gaute, 2012. "Employee referral, social proximity and worker discipline," CAGE Online Working Paper Series 90, Competitive Advantage in the Global Economy (CAGE).
    12. Sakai, Yoko & Estudillo, Jonna P. & Fuwa, Nobuhiko & Higuchi, Yuki & Sawada, Yasuyuki, 2012. "Do Natural Disasters Affect the Poor Disproportionately? The Case of Typhoon Milenyo in the Rural Philippines," PRIMCED Discussion Paper Series 31, Institute of Economic Research, Hitotsubashi University.
    13. Kusadokoro, Motoi & Maru, Takeshi & Gültekin, Ufuk, 2. "Networks And Intermediaries In Seasonal," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(2).
    14. Tsusaka, Takuji W. & Kajisa, Kei & Pede, Valerien O. & Aoyagi, Keitaro, 2015. "Neighborhood effects and social behavior: The case of irrigated and rainfed farmers in Bohol, the Philippines," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 227-246.
    15. Takahashi, Kazushi & Otsuka, Keijiro, 2007. "Human Capital Investment and Poverty Reduction over Generations: A Case from the Rural Philippines, 1979-2003," IDE Discussion Papers 96, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    16. Sakai, Yoko & Estudillo, Jonna P. & Fuwa, Nobuhiko & Higuchi, Yuki & Sawada, Yasuyuki, 2017. "Do Natural Disasters Affect the Poor Disproportionately? Price Change and Welfare Impact in the Aftermath of Typhoon Milenyo in the Rural Philippines," World Development, Elsevier, vol. 94(C), pages 16-26.

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