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

Vegard Iversen Iversen () and Gaute Torsvik
Additional contact information
Vegard Iversen Iversen: University of Manchester, Postal: School of Environment and Development, , The University of Manchester, , PO Box 88, Manchester, , M60 1QD, UK ,, http://www.sed.manchester.ac.uk/idpm/staff/iversen_vegard.htm

No 14/11, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: 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.

Keywords: Work Migration; Social Networks; Screening; Moral Hazard (search for similar items in EconPapers)
JEL-codes: J24 J61 R23 Z13 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2011-12-15
New Economics Papers: this item is included in nep-cta, nep-lma, nep-mig, nep-net, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://ekstern.filer.uib.no/svf/2011/WP14.11.%20RIKTIGpdf.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:bergec:2011_014

Access Statistics for this paper

More papers in Working Papers in Economics from University of Bergen, Department of Economics Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by Kjell Erik Lommerud ().