Network mechanisms and social ties in markets for low- and unskilled jobs: (theory and) evidence from North-India

Abstract: Workplace referrals may resolve incentive problems that arise due to incomplete contracts. We use an in-depth primary data set covering low- and unskilled migrants from Western Uttar Pradesh (India), to examine this and alternative explanations for referral-based recruitment. We find little evidence of referral screening for unobservable worker traits, but some support for a hypothesis of referral as a mechanism to enforce workforce discipline. Two observations back this conjecture: the high prevalence of strong kinship ties between referees and new recruits and that those who recruit are in more ‘prestigious’ jobs and therefore have higher stakes vis-à-vis their employer. These main findings are exposed to robustness checks to rule out rival explanations: that entry through a workplace insider merely reflects privileged access to job vacancy information; that workplace clustering results from preferences for working together or that the higher prevalence of referral for very young migrants that we observe may reflect that referral has an insurance dimension.Work Migration; Social Networks; Screening; Moral Hazard

Employee referral, social proximity and worker discipline

We study ex-post hiring risks in low income countries with limited legal and regulatory frameworks. In our theory of employee referral, the new recruit internalises the rewards and punishments of the in-house referee meted out by the hiring firm. This social mechanism makes it cheaper for the firm to induce worker discipline. The degree of internalization depends on the unobserved strength of the endogenous social tie between the referee and the recruit. When the referee's utility is increasing in the strength of ties, referee workplace incentives do not matter and referee and employer incentives are aligned: in this case industries and jobs with high costs of opportunism and where dense kinship networks can match the skill requirements of employers will have clusters of close family and friends, they will show a high incidence of referrals rather than anonymous hiring and will show a wage premium to referred workers matched by their higher productivity. This no longer applies if the referee's utility is decreasing in the strength of ties: referrals are then more costly for firms, they will be used less frequently by employers and will require higher referee wages (or status). We illustrate how these insights add to our understanding of South-Asian labour markets

Caste, local networks and lucrative jobs: Evidence from rural Nepal

Abstract: We study how local connections to persons in influential positions affect access to migrant jobs and government employment. In rural Nepal, it would not be surprising if social status strongly influenced the access to attractive labor market opportunities. This is not the case. Although much of the variation in migration can be attributed to wealth, education and social identity, household networks have a separate impact on external employment. Wellconnected households are more likely to get government jobs and appear to have favorable access to the manpower agencies and informal loans required to finance migration to the Persian Gulf or Malaysia.Geographic labor Mobility; Immigrant Workers; Model Construction and Estimation; Regional Migration; Regional Markets; Population; Neighborhood Characteristics

Caste, local networks and lucrative jobs: Evidence from rural Nepal

We study how local connections to persons in influential positions affect access to lucrative international migrant jobs and attractive government employment. In rural Nepal, it would not be surprising if social status, captured by a household’s caste but also by wealth or education, strongly influenced or perhaps even exclusively determined the access to attractive labour market opportunities.  This is not the case. Although much of the variation in migration can be attributed to wealth, education and social identity, household networks have a separate impact on external employment. Well-connected households are more likely to get government jobs and appear to have favorable access to the manpower agencies and the informal loans required to finance migration to the Persian Gulf or Malaysia.  

Social audits and MGNREGA Delivery: Lessons from Andhra Pradesh

Using unique panel data assembled from official reports, we study the impact of social audits on Mahatma Gandhi National Rural Employment Guarantee Act delivery in Andhra Pradesh. Within a dynamic framework where beneficiaries, auditors, and transgressors interact and learn, we find a positive but insignificant impact of audits on employment generation and a modest decline in the leakage amount per labor-related irregularity: outcomes with high beneficiary stakes. This occurs alongside an increase in material-related irregularities with lower beneficiary stakes. Although we find evidence suggestive of beneficiary “learning” and of audit effectiveness in detecting irregularities, repeated audits did not deter irregularities. This highlights the need for a time-bound process where transgressors are punished and responsibilities for follow-up of social audit findings laid out and credibly enforced

Archives Use of Social Media to Develop Connections with Family Historians

The purpose of this paper is to report the results of a research project designed to investigate how social media is being used by archives to develop connections with family historians. This research used qualitative methodology and utilised Skype and Instant Messaging to conduct semi-structured interviews with participants from six archives. The research uses Rogers’ Diffusion of Innovation theory as a framework. The research found the interviewees were using social media in various combinations to serve different purposes. In the majority of cases these tools were being used to achieve maximum access to the wider online community. The study highlights issues and concerns discussed by participants when using social media. There were limited examples of social media use to make connections with family historians during the study. Nonetheless this paper provides three detailed instances of its use to illustrate how archives can make these connections

Job recruitment networks and migration to cities in India

Economists 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.

Caste dominance and economic performance in rural India

Using a unique household panel data set for rural India covering the years 1993/1994 and 2004/2005 we test a key theoretical assertion of caste and its effects, namely that marginalised social groups fare worse in terms of income levels when resident in villages dominated by upper castes. We also test whether marginalised groups perform better or worse in villages where their own group is dominant. We proceed to explore the implications for income growth and for poverty incidence and persistence. After controlling for potential locational confounds, upper caste dominance confers a positive externality on other social groups. This externality is discounted by group specific `oppression' effects which range in size from zero to 16 percent of mean income and peak for Scheduled Caste (SC) and Other Backward Classes (OBC) households. Further, we identify positive and large own dominance (village `enclave') effects that account for as much as a quarter of mean income for SC households in the post reform years. These results are robust to how dominance is measured. We also identify pathways through which identity-based welfare disparities may be reduced; while such disparities are widening, their causes show signs of both persistence and change. Whereas education matters, land redistribution provides the key to eliminating the adverse effects of upper caste dominance. Even after factor endowment and other controls have been added, and with the notable exception of those in SC dominated villages, SCs not only perform worse than other groups but have fallen further behind during the post reform years.

Does one size fit all? An experimental test of household models in East Uganda

We test core theories of the household using variants of a public good game and experimental data from 240 couples in rural Uganda. Spouses do not maximise surplus from cooperation and realise a greater surplus when women are in charge. This violates assumptions of unitary and cooperative models. When women control the common account, they receive less than when men control it; this contradicts standard bargaining models. Women contribute less than men and are rewarded more generously by men than vice versa. This casts doubt on postulates in Sen (1990). We also find strong evidence for opportunism. The results are put in a socioeconomic context using survey data and follow-up interviews, which provides hints of the external validity of our findings; more so for contribution than for allocation behaviour. Taken together, our findings suggest that a `one-size fits all' model of the household is unlikely to be satisfactory.

What’s love got to do with it ? An experimental test of household models in East Uganda

We test core theories of the household using variants of a public good game and experimental data from 240 couples in rural Uganda. Spouses do not maximise surplus from cooperation and realise a greater surplus when women are in charge. This violates assumptions of unitary and cooperative models. When women control the common account, they receive less than when men control it; this contradicts standard bargaining models. Women contribute less than men and are rewarded more generously by men than vice versa. This casts doubt on postulates in Sen (1990). While the absence of altruism is rejected, we find evidence for opportunism. The results are put in a socioeconomic context using quantitative and qualitative survey data. Assortative matching and correlates of bargaining power influence behaviour within the experiments. Our findings suggest that a .one-size fits all. model of the household is unlikely to be satisfactory.