Referral and Job Performance: Evidence from the Ghana Colonial Army

Fafchamps, Marcel; Moradi, Alexander

doi:10.1086/681276

Cited by 40 publications

(29 citation statements)

References 21 publications

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“…Social networks are an important component of everyday life and determinant of socioeconomic outcomes, both in developed and developing countries. Among other things, they are known to influence physical and mental health Fowler, 2007, 2009), educational achievements (Sacerdote, 2001), and labour market outcomes (Ioannides and Datcher Loury, 2004, Beaman and Magruder, 2012, Fafchamps and Moradi, 2015, which is also the focus of this study. In developing countries, they often fulfil additional roles as financial safety nets (Collins et al, 2009) or providers of insurance (Banerjee and Duflo, 2007).…”

Section: Job Information Network In a Large Sub-saharan African Citymentioning

confidence: 99%

Job referrals and strategic network formation -- Experimental evidence from urban neighbourhoods in Ethiopia

Witte¹

2017

AEA Randomized Controlled Trials

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In this paper, I study the behavioural motivations underlying job referral decisions. In a field experiment in Addis Ababa, Ethiopia, I show that when choosing whom to refer for a job, individuals trade off personal benefits and altruistic considerations, with important implications for the efficiency and equity of the referral process. Using complete data on urban social networks and generating a panel of real work and referral opportunities over multiple sessions, I first show that workers rely on reciprocity. This leads to both significant on-the-job productivity losses and persistence in the exclusion of less connected individuals. This dynamic reciprocity is reduced under incentivised referrals, where workers are paid according to the output of their referral, which makes them screen more productive workers. Second, I find that peripheral workers use job referrals strategically to enlarge their network: they are more likely to establish new and reciprocated links, with connections persisting after 18 months. I show that these findings are consistent with a network-based job referral model where individuals trade off social payoffs and altruistic considerations. My findings suggest that conventional job referrals through social networks can reinforce labour market inequalities and prevent less socially connected individuals from getting access to jobs. However, when given referral opportunities, these individuals can manage to escape exclusion even in the long-run. Policy-makers could exploit this and provide subsidised one-off work and referral opportunities for individuals detached from the labour market, with the goal of alleviating long-term unemployment.

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Section: Job Information Network In a Large Sub-saharan African Citymentioning

confidence: 99%

Job referrals and strategic network formation -- Experimental evidence from urban neighbourhoods in Ethiopia

Witte¹

2017

AEA Randomized Controlled Trials

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“…For employers, disseminating vacancy information through employee networks is easy and inexpensive. Alternately, if employee networks are assortatively matched, firms can mobilise the networks of more able or productive staff to find new recruits with similar traits (Montgomery 1991;Fafchamps and Moradi 2015). Referral-based recruitment may also provide job candidates with more accurate information about a workplace, thereby improving the quality of the recruit-workplace match (Simon and Warner 1992).…”

Section: Introductionmentioning

confidence: 99%

Employee Referral, Social Proximity, and Worker Discipline: Theory and Suggestive Evidence from India

Dhillon

Iversen

Torsvik

2021

Economic Development and Cultural Change

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We propose a new theory to explain why employers mobilize workplace insiders for the hiring of new staff. In settings with incomplete contracts, we show how workplace insiders can help employers tackle recruit discipline challenges at a lower cost. A key idea is that the employer can use sanctions against the referee to keep the new hire in line. Our model predicts that employers will use existing staff of stature and with accumulated goodwill within the firm as referees, since such staff have a personal stake in their choice of recruit. The model also predicts a strong social tie between the referee and the recruit to ensure that the recruit internalizes the costs to the referee of own misbehavior or underperformance. We use a small, in-depth dataset from India to scrutinize how well the predictions of our theory and of the main rival explanations for referral align with hiring patterns, wage and labor turnover observations. We find suggestive support for our theory and argue that these findings are hard to reconcile with rival referral explanations. JEL: J41, J31, D82, D86, O12, O17

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“…Sub-Saharan Africa refers to the colonial period (Fafchamps and Moradi [2009]). However, this region is pervaded with informality to a greater extent than other developing countries 14 and social networks play a crucial role in their labor markets 15 .…”

Section: Introductionmentioning

confidence: 99%

Social Networks and Wages in Senegal's Formal Sector

Berardi

2013

SSRN Journal

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Nous développons un cadre théorique prenant en compte le rôle joué par l'aléa moral et la diversité de réseaux et cultures dans le choix du canal d'embauche. Dans des contextes de favoritisme, les réseaux sociaux, et particulièrement les liens forts, sont adoptés comme canaux d'embauche pour des postes peu qualifiés et impliquent des pénalités salariales, tandis que le contraire arrive autrement. Nous estimons un modèle de changement de régimes endogène pour le cas du secteur manufacturier formel Sénégalais et trouvons que, de façon cohérente avec les prédictions du modèle théorique dans le cas de favoritisme, les canaux d'embauche informels sont préférés pour des postes peu qualifiés et sont associés avec des pénalités salariales, particulièrement quand les liens sont forts.

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Referral and Job Performance: Evidence from the Ghana Colonial Army

Cited by 40 publications

References 21 publications

Job referrals and strategic network formation -- Experimental evidence from urban neighbourhoods in Ethiopia

Job referrals and strategic network formation -- Experimental evidence from urban neighbourhoods in Ethiopia

Employee Referral, Social Proximity, and Worker Discipline: Theory and Suggestive Evidence from India

Social Networks and Wages in Senegal's Formal Sector

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