Job recruitment networks and migration to cities in India

Vegard Iversen (), Kunal Sen, Arjan Verschoor and Amaresh Dubey
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Vegard Iversen: School of Development Studies, University of East Anglia, Norwich
Arjan Verschoor: School of Development Studies, University of East Anglia, Norwich
Amaresh Dubey: CSRD, Jawaharlal Nehru University, New Delhi`

Discussion Papers from Indian Statistical Institute, Delhi

Abstract: 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.

Pages: 36 pages
Date: 2009-01
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Job Recruitment Networks and Migration to Cities in India (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:alo:isipdp:09-01

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