TY - JOUR
T1 - Network effects on labor contracts of internal migrants in China
T2 - a spatial autoregressive model
AU - Baltagi, Badi H.
AU - Deng, Ying
AU - Ma, Xiangjun
N1 - Funding Information:
This project was supported by National Natural Science Foundation of China [71503045], [71401038], [11671084] and Beijing Social Science Funding [15JGC158]. All errors are the responsibility of the authors. We would like to thank the guest editor Harry Kelejian and an anonymous referee. In addition, we thank Henk Folmer for their constructive comments and suggestions.
Publisher Copyright:
© 2017, Springer-Verlag GmbH Germany.
PY - 2018/8/1
Y1 - 2018/8/1
N2 - 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.
AB - 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.
KW - Co-villager network
KW - Contract
KW - Internal migrants
KW - Spatial autoregressive logit model
UR - http://www.scopus.com/inward/record.url?scp=85028586281&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85028586281&partnerID=8YFLogxK
U2 - 10.1007/s00181-017-1333-3
DO - 10.1007/s00181-017-1333-3
M3 - Article
AN - SCOPUS:85028586281
SN - 0377-7332
VL - 55
SP - 265
EP - 296
JO - Empirical Economics
JF - Empirical Economics
IS - 1
ER -