Migrant Networks in the Urban Labour Market: Evidence from India

Abstract

This paper analyses the informal channels of the job search process through migrant networks in the urban labour markets in developing countries. Using a novel approach and nationwide sample survey, we measure various aspects of migrant networks such as size, diversity, efficiency and experience content and estimate their effect on probability of employment. Our findings suggest that migrant stock (having experience content) has an inverted-U relationship with the probability of finding a job for a migrant. The share of employed workers in a migrant network (efficiency) and different origin identity (diversity) positively affect the employment outcome through weak ties. Further, the migrant network effect is more active in larger cities as compared to smaller urban areas. The implications of this study indicate towards the importance of non-market informal channels in job searches and the need for integrating labour markets to harness the benefits of larger positive network externalities.