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Social Networks and Labour productivity: A survey of recent theory and evidence

Author

Listed:
  • Farzana Afridi

    (Economics and Planning Unit,Indian Statistical Institute, New Delhi and Research Fellow, IZA)

  • Amrita Dhillon

    (Department of Political Economy, King’s College London, External Affiliate, CAGE, University of Warwick and Associate Member, Nuffield College.)

  • Swati Sharma

    (Economics and Planning Unit, Indian Statistical Institute, New Delhi)

Abstract

In this paper we survey some of the more recent theoretical and empirical literature on social networks and labour productivity. We discuss the use of referrals in recruitment of workers and the possible mechanisms underlying their use as well as ex-post effects on productivity from having connected workers in the firm and the channels for these effects. We also suggest some open questions for further research.

Suggested Citation

  • Farzana Afridi & Amrita Dhillon & Swati Sharma, 2015. "Social Networks and Labour productivity: A survey of recent theory and evidence," CAGE Online Working Paper Series 243, Competitive Advantage in the Global Economy (CAGE).
    • Handle: RePEc:cge:wacage:243
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    References listed on IDEAS

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    1. Calvo-Armengol, Antoni & Zenou, Yves, 2005. "Job matching, social network and word-of-mouth communication," Journal of Urban Economics, Elsevier, vol. 57(3), pages 500-522, May.
    2. Kugler, Adriana D., 2003. "Employee referrals and efficiency wages," Labour Economics, Elsevier, vol. 10(5), pages 531-556, October.
    3. Dhillon, Amrita & Peeters, Ronald & Muge Yukse, Ayse, 2014. "Overcoming Moral Hazard with Social Networks in the Worksplace: An Experimental Approach," CAGE Online Working Paper Series 183, Competitive Advantage in the Global Economy (CAGE).
    4. Marcel Fafchamps & Alexander Moradi, 2015. "Referral and Job Performance: Evidence from the Ghana Colonial Army," Economic Development and Cultural Change, University of Chicago Press, vol. 63(4), pages 715-751.
    5. Amrita Dhillon & Vegard Iversen & Gaute Torsvik, 2013. "Employee Referral, Social Proximity and Worker Discipline: Theory and Evidence from India," CESifo Working Paper Series 4309, CESifo.
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    20. Lori Beaman & Jeremy Magruder, 2012. "Who Gets the Job Referral? Evidence from a Social Networks Experiment," American Economic Review, American Economic Association, vol. 102(7), pages 3574-3593, December.
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    25. Marcel Fafchamps & Alexander Moradi, 2015. "Referral and Job Performance: Evidence from the Ghana Colonial Army," Economic Development and Cultural Change, University of Chicago Press, vol. 63(4), pages 715 - 751.
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    Cited by:

    1. Afridi, Farzana & Dhillon, Amrita & Sharma, Swati, 2024. "The ties that bind us: Social networks and productivity in the factory," Journal of Economic Behavior & Organization, Elsevier, vol. 218(C), pages 470-485.
    2. Afridi, Farzana & Dhillon, Amrita & Li, Sherry Xin & Sharma, Swati, 2020. "Using social connections and financial incentives to solve coordination failure: A quasi-field experiment in India's manufacturing sector," Journal of Development Economics, Elsevier, vol. 144(C).
    3. Swati Sharma, 2021. "Gender and workplace interactions: who is likely to lose?," IEG Working Papers 426, Institute of Economic Growth.
    4. Afridi, Farzana & Dhillon, Amrita, 2022. "Social Networks and the Labour Market," IZA Discussion Papers 15774, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Referrals; Screening; Search; Learning; Moral Hazard; Peer effects; co-worker networks; strength of ties; wage premia; wage penalty; favouritism. JEL Classification: J41; J31; D82; D86; O12; O17;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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