“Can Social Networks Increase Migrant Workers’ Wages?”, Management World, No. 3, pp. 45~54
- Whether and how will migrant workers’ social networks influence their wage?
- Migrant workers’ social networks have rare direct impact on their wages.
- Social networks can affect wages by changing opportunities to different job types.
- The reason is as below. Most migrant workers in China are working in low-skilled industry, where competitiveness is relatively high and the role of diminishing information asymmetry by social networks has little influence.
- The correlation between social network and wage is often observed. But social network itself has a problem of endogeneity as people with higher wages might have higher willingness and ability to invest in their social capital such as relative or friend networks. This article uses two instrument variables to solve this problem. One is whether the hometown was Communist-controlled Area(革命老区) during the Republican and Chinese Civil War era (1920s~1940s), and the other one is whether one’s parents or grandparents were classified as “Black Class”(黑色阶级) during the Land Reform movement (1950s).
- Survey was conducted by Chinese Academy of Social Science (CASS) in 2003. 37969 farmers in 961 villages in 121 counties out of 22 provinces were randomly selected. The sample size of migrant workers in this paper is 2047.