Network Effects on Labor Contracts of Internal Migrants in China: A Spatial Autoregressive Model
Badi Baltagi (),
Ying Deng () and
Xiangjun Ma ()
Additional contact information
Ying Deng: School of International Trade and Economics, Beijing
Xiangjun Ma: School of International Trade and Economics, Beijing
No 10926, IZA Discussion Papers from Institute of Labor Economics (IZA)
This paper studies the fact that 37 percent of the internal migrants in China do not sign a labor contract with their employers, as revealed in a nationwide survey. These contract-free jobs pay lower hourly wages, require longer weekly work hours, and provide less insurance or on-the-job training than regular jobs with contracts. We find that the co-villager networks play an important role in a migrant's decision on whether to accept such insecure and irregular jobs. By employing a comprehensive nationwide survey in 2011 in the spatial autoregressive logit model, we show that the common behavior of not signing contracts in the co-villager network increases the probability that a migrant accepts a contract-free job. We provide three possible explanations on how networks influence migrants' contract decisions: job referral mechanism, limited information on contract benefits, and the "mini labor union" formed among co-villagers, which substitutes for a formal contract. In the sub-sample analysis, we also find that the effects are larger for migrants whose jobs were introduced by their co-villagers, male migrants, migrants with rural Hukou, short-term migrants, and less educated migrants. The heterogeneous effects for migrants of different employer types, industries, and home provinces provide policy implications.
Keywords: contract; co-villager network; spatial autoregressive logit model; internal migrants (search for similar items in EconPapers)
JEL-codes: O15 R12 J41 (search for similar items in EconPapers)
Pages: 32 pages
New Economics Papers: this item is included in nep-cna, nep-geo, nep-lma, nep-mig, nep-net and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Published in: Empirical Economics 2018, 55 (1), 265-296
Downloads: (external link)
Journal Article: Network effects on labor contracts of internal migrants in China: a spatial autoregressive model (2018)
Working Paper: Network Effects on LaborContracts of Internal Migrants in China- A Spatial Autoregressive Model (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp10926
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().