This research project aims at understanding the links between labour, skills, social and professional dynamics and social networks formation in South Asia. In a context of rapid socio-economic development in India, this project explores how the formation of skills and social networks, especially those defined at the community and individual levels¹ , influence the characteristics of individuals’ trajectories in terms of social status, employment and migration.
Part of the empirical agenda under this axis builds on the RUME data collected in 2010 at IFP as part of the "Labour, Finance and Social Dynamics" programme in Axis 3.
The formation and use of social networks
A large literature in sociology and economics has shown the importance of using parents, friends, and other acquaintance to search for job, to create a microenterprise or to help employers select employees. Many studies have also highlighted the essential function of social networks in developing and emerging countries, where institutional social welfare systems (unemployment compensation, social security) are weak or non-existent.Social and family ties are known to provide a range of benefits for individuals and households. These networks are crucial because they are often a private solution to market failures when there is lack of (or imperfect) information, i.e. lack of formal institutions channeling information about individuals, jobs or market opportunities. Social networks are in particular decisive in areas where markets do not exist, but also where markets exist but the costs of finding out about individual characteristics is high, especially in the labour market. A number of studies in different countries found that social and family ties hence provide informal risk sharing to poor and rural households. This is because these networks are able to enforce social norms which in turn lower transactions costs, and reduce risks when mechanisms such as efficient contract enforcement are not provided publicly.
Central questions in this programme are then: (i) to what extent social networks are used and may lead to better/poorer employment prospects and social trajectories; (ii) how and why different types of social networks can lead to differentiated paths in the labour market.
Castes and networks
This programme also provides new insights regarding the emancipatory power in urban and rural contexts in India, where past and new forms of community relations organised around a rigid social structure (e.g. the caste) represent a trap in which individuals are historically victims of patronage mechanisms maintained by the dominant castes. In India, maybe more than anywhere else, the issue of networks appears to be strongly embedded in a complex system of social identity, hierarchical organisation and traditional institutions. This programme allows providing a better understanding of the social and cultural interactions between these different concepts.
(Non)cognitive skills and labour
Non-cognitive skills or personality traits have recently received significant attention as determinants of labour performance. In fact, these non-cognitive traits, referring to qualities such as motivation, leadership, self-esteem, social skills, etc., have in some cases been shown to be at least as important as cognitive skills (such as numeracy and literacy) for earnings and employment prospects. Theoretically, personality traits can have both direct and indirect effects on labour market integration and success. They can affect employability and productivity directly by being considered as part of an individual's set of endowments, or serve as incentive-enhancing preferences. Additionally, they can indirectly affect individuals’ social inclusion, for instance, through effects on aspirations, occupational choice and educational attainment.
These “human capital” attributes, or skills, have also been found to have an impact on the formation and use of social networks for job search. Some studies in economics suggest that individuals with higher cognitive skills have access to broader social networks. Individuals who possess more of certain (non)cognitive skills (openness to experience, extraversion, and emotional stability) possess larger and more diverse social networks, illustrating the endogeneity of network formation.
Despite this evidence of endogenous network formation, little is known about to what extent individual differences predict a worker’s likelihood of using social networks in favour of other (formal) techniques in searching for a job, especially in a developing country context such as India. In this country, social structure, institutions and norms affect individual labour, mobility, trajectories, or any other individual choices, oftentimes by constraining them. Up to now, the role of non-cognitive skills has been evaluated in isolation of the external environment, by purely focusing on their effects on individual choices and preferences, thereby neglecting the social structures in which the individuals evolve, and the so-called individual-environment interactions. In this programme, not only researchers would like to measure precisely what one usually neglects in the case of a developing country such as India, but also the idea is to show more broadly the existence of a plurality of mechanisms in individual decision making (both individual and social). Showing empirically whether or not cognitive and non-cognitive traits play on individuals’ choices enables us to open the black box of the various structural and institutional forces at play.
Household and individual surveys in rural Tamil Nadu
The surveys of the LAKSMI project are based on a plurality of methods and will combine statistical approaches ("quantitative") with "qualitative" socio-economic data collection and analysis in the field of Tamil Nadu.
In collaboration with Isabelle Guérin (IRD, CESSMA), and a team of researchers and enumerators at the IFP (led by G. Venkatasubramanian), one of the main goals of this programme, launched in January 2016, is to design and implement a second wave of quantitative data collection from households and individuals in 10 rural villages in the state of Tamil Nadu (South India).Based on open and semi-structured interviews, the qualitative survey of the LAKSMI programme aims at examining a sub-sample of individuals selected from the quantitative survey in order to complement the quantitative information. The quantitative and qualitative surveys are conducted almost in parallel so as to allow interactions and mutual benefits.
Method and objective of the quantitative survey
The sampling method of the quantitative approach follows broadly that of the 2010 RUME project in 10 villages of Tamil Nadu.
First, the 2016 wave – entitled the Networks, Employment, dEbt, Mobilities and Skills in India Survey (NEEMSIS) – is first conducted on the same 405 households in order to obtain panel data and undertake longitudinal analysis. A longitudinal study is particularly interesting in the moving context of rural India which experiences both fast changes, but also keeps some rigid social structure. One objective of this quantitative survey is thus to recover all the 2010 households and, if possible, the individuals who have left their household and created a new one. This requires the implementation of "tracking" methodology, e.g. searching for individuals who moved "definitively" from their original residential place between the two survey waves.
Second, in addition to the 405 households feeding a panel dataset, around 10 households by village will be added to the final sample in order to increase the sampled population up to 500 households. These new families intend to keep constant overtime (or increase) the number of households surveyed in the 10 villages, ensure sample representativeness, and thus may correct for the potential sample attrition. This aspect is crucial for long term analysis of social dynamics at the village level.
The quantitative survey tools
In addition to RUME 2010 modules, which were related to economic and social vulnerability of households, financial practices (debt and microfinance) and employment trajectories, new modules and observation units are added in 2016. The 2010 questionnaire was addressed to the household head and collected information both at household and individual levels. In 2016, in addition to a similar household questionnaire addressed to the head, we designed an individual questionnaire directly addressed to two household members (the household head and a second younger member randomly selected on a criterion of age – 18 to 35 depending on availability). This individual questionnaire includes modules on labour force participation, professional and social aspiration, cognitive and personality traits inspired by the psychology and cognitive science approaches, and a social network module following the name generator sociological method. Hence, a diversity of approaches and tools are used in this quantitative survey.
Another innovation of this second wave is the use of tablets for data collection, relying on the Survey CTO software. This tool allows us to increase the quality of the data collected, because it is meant to check quality at each stage of the data entry process (missing observations, constraints on answers),and also to reduce the cost, time and errors associated with data entry as this is done instantaneously on the field.
The qualitative surveys
The objectives of the LAKSMI qualitative surveys are to collect life histories, through recorded interviews, that can be used to enrich and illustrate the statistical analyses stemming from the quantitative data. More than a simple complement to the quantitative survey, we believe that the qualitative approach provides another understanding of the statistical findings, raising new questions and highlighting new non-quantifiable elements observed outside the scope of a quantitative approach.
Hence, the two quantitative and qualitative approaches are carried out jointly in order to facilitate the fieldwork and mutual enrichment.
¹ Social networks may be defined as a social structure made of nodes (which are generally individuals or organizations) that are tied by one or more specific types of interdependency, such as kinship, friendship, values, beliefs, conflict or trade.
Selected publications and working papers of the LAKSMI team
Guérin, I. D’Espallier, B. Venkatasubramanian, G. (2013), “Debt in Rural South India: Fragmentation, Social Regulation and Discrimination”, Journal of Development Studies, 49(9): 1155-1171.
Guérin, I. D’Espallier, B. Venkatasubramanian, G. (2015), “The Social Regulation of Markets. Why Microcredit Fails to Promote Jobs in Rural South India”, Development and Change, 46(6): 1277-1301.
Guérin, I. Kumar, S. (2016), “The Uneasy Relationship Between Market and Freedom. Is Microcredit a Source of Empowerment or Domination for Women?”, Journal of Development Studies (special issue Microfinance and Women’s Empowerment), DOI: 10.1080/00220388.2016.1205735.
Guérin, I., Subramanian, P., Venkatasubramanian, G., Michiels, S. (2012), “Ambiguities and Paradoxes of the Decent Work Deficit: Bounded Migrants in Tamil Nadu”, Global Labour Journal, Vol. 3, n°1, pp.118-142.
Guérin, I., Venkatasubramanian, G., Michiels, S. (2015), “Labour in Contemporary South India”, in Harriss-White B. and Heyer J. (eds.), Indian Capitalism in Development, Abingdon, Routledge, pp. 118-135.
Hilger, A., Nordman, C.J., Sarr L.R., (2016), “Cognitive and Non-Cognitive Skills, Hiring Channels and Wages in Bangladesh”, DIAL Working Paper.
Nordman, C.J., Nguyen, H.C. (2017), “Household Entrepreneurship and Social Networks: Panel Data Evidence from Vietnam”, Journal of Development Studies, forthcoming.
Nomura, S., Hong, S.Y., Nordman, C.J., Sarr, L.R., Vawda, A.Y. (2014), “An Assessment of Skills in the Formal Sector Labor Market in Bangladesh: A Technical Report on the Enterprise-Based Skills Survey 2012”, Discussion Paper Series, Report No. 63, South Asia Human Development Sector, Washington: The World Bank.
Nordman, C.J. (2016), “Do Family and Kinship Ties Support Entrepreneurs in Developing Countries?”, IZA World of Labor, 262, DOI: 10.15185/izawol.262.
Nordman, C.J., Sarr, L.R., Sharma, S. (2015), “Cognitive, Non-cognitive Skills and Gender Wage Gaps: Evidence from Linked Employer-Employee Data in Bangladesh”, IZA Discussion Paper No. 9132.
Nordman, C.J., Sharma, S. (2016), “The Power to Choose: Gender Balance of Power and Intra-household Educational Spending in India”, WIDER Working Paper 2016/61.