Document Type

Working Paper

Date

Fall 9-2017

Keywords

Contract, Co-Villager Network, Spatial Autoregressive Logit Model, Internal Migrants, Labor, Wages, Mini Labor Union

Language

English

Disciplines

Economics | Labor Economics | Macroeconomics | Work, Economy and Organizations

Description/Abstract

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.

ISSN

1525-3066

Additional Information

Working paper no. 207

This project is 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. They would like to thank the guest editor Harry Kelejian, and an anonymous referee. In addition, Henk Folmer for their constructive comments and suggestions.

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Source

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Creative Commons License

Creative Commons Attribution 3.0 License
This work is licensed under a Creative Commons Attribution 3.0 License.

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