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

The study is a lab-in-the-field experiment on social network referrals in day labour markets.

The study comprises three different referral interventions:
1. Referral treatment (revealed social network centrality)
2. Referral treatment (concealed characteristics)
3. Referral treatment (performance incentivised)
4. Control group

In detail, the treatments/interventions are defined as follows: Intervention 1 allows participants to refer one other person from their neighborhood to the same day work the next day (the work is provided by the researcher). For this intervention, participants are given an exhaustive list with all eligible other individuals living in their neighborhood, including everyone’s degree centrality (as measured by number of connections in the neighborhood). Intervention 2 is similar to intervention 1, but does not reveal the other individuals’ degree centrality. Intervention 3 is similar to intervention 1, but the person referring another individual from the neighborhood to the day work receives a payment based on the referrals work performance.

In general, the day work I am providing is similar to office-style, workplace-related jobs. The task performance is incentivised for all participants, with a maximum payment of 200 ETB (~ 7 GBP). Work sessions take place on consecutive days or are spread over a whole day. The multiple rounds of the lab-in-the-field experiment are unannounced ex ante (to ensure comparability between other/same referrals).

2016-12-15

2017-02-15

My main outcome of interest is whether individual i makes a referral to individual j.

The referral outcome is a binary indicator, measuring whether individual i is referring individual j to the day work. This outcome is measured at different points in time, after each round of the experiment.

Short summary:
- Baseline survey of over 600 individuals;
- Several rounds of a lab-in-the-field experiments with three different referral treatments;
- Follow-up phone survey of participants

Details:
- I randomly select 17 densely populated urban neighbourhoods in Addis Ababa, where I collect baseline data on young unemployed individuals and their social networks.
- Within the selected neighbourhoods, I take a census (door-to-door solicitation) of all eligible resident individuals, where eligibility is defined as follows: Permanently living in the selected neighbourhood; between 18 and years of age; not in permanent employment or education.
- These eligible individuals are surveyed with a baseline questionnaire, including questions on personal characteristics, labour market outcomes, behavioural questions, and a detailed social network section, containing a range of questions about every other eligible individual in the neighbourhood.
- I then conduct a lab-in-the-field experiment in various locations in Addis Ababa: After the baseline survey, a random subsample from each neighbourhood is invited to a paid day job (the lab-in-the-field experiment). Lab sessions take place separate by neighbourhood
- The lab sessions consist of a work-related and quantifiable effort task. After the completion of the task, participants are randomly allocated to different work referral treatments (described above). The day job experiment is repeated over three rounds.
- A few days after participating in the lab-in-the-field experiment, participants are called by phone and asked follow-up questions on the referral decisions they made.
- Eventually, this experiment tests what influences the linking decisions between participants through the different referral treatments, and whether these social job networks are formed strategically. A particular focus will be on the role of networks centrality in referring other workers vs. correlated social characteristics of individuals. A further focus will be on reciprocity in referring (measured over the multiple rounds of the experiment) as well as permanent exclusion from the temporary day labour market opportunities I am generating.

Randomisation before sessions done in office by a computer (allocation to lab sessions and treatment groups)

Individuals (young job-seekers)

No

17 neighbourhoods, without clustering. All treatments are implemented in all neighbourhoods

Approximately 600 individuals

150 referral treatment 1, 150 referral treatment 2, 150 referral treatment 3, 150 control group