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Job recruitment networks and migration to cities in India

[journal article]

Iversen, Vegard; Sen, Kunal; Verschoor, Arjan; Dubey, Amaresh

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Abstract Economists have focused on job search and supply-side explanations for network effects in labour transactions. We develop 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. 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.
Keywords migration
Classification Sociology of Developing Countries, Developmental Sociology; Migration, Sociology of Migration
Free Keywords employment and law; South Asia; social capital; social issues; economics
Document language English
Publication Year 2009
Page/Pages p. 522-543
Journal Journal of Development Studies, 45 (2009) 4
DOI http://dx.doi.org/10.1080/00220380902725688
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)
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