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Title: Network effects on labor contracts of internal migrants in China: a spatial autoregressive model
Authors: Baltagi, Badi H.
Deng, Ying
Ma, Xiangjun
First Published: 30-Aug-2017
Publisher: Springer Verlag for Physica Verlag
Citation: Empirical Economics, 2017, pp. 1-32
Abstract: This paper studies the fact that 37% 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 subsample 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.
DOI Link: 10.1007/s00181-017-1333-3
ISSN: 0377-7332
eISSN: 1435-8921
Version: Post-print
Status: Peer-reviewed
Type: Journal Article
Rights: Copyright © 2017, Springer Verlag for Physica Verlag. Deposited with reference to the publisher’s open access archiving policy.
Description: The file associated with this record is under embargo until 12 months after publication, in accordance with the publisher's self-archiving policy. The full text may be available through the publisher links provided above.
Appears in Collections:Published Articles, Dept. of Economics

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