Study On Social Networks’ Impact On The Wages Of Migrant Workers

With the rapid development of social economy and urbanization, more and more rural people come into the city labor market. The migrant workers are the main force in the construction of the city and play an important role in promoting the economic development. But limited to the ability to collect information on the labor market, migrant workers are in a weak position, facing the situation of low wages.Based on the literature of the social network theory and social networks’ effect on wage, we focus on social networks, analyzing the influence of social networks on the wage level of migrant workers. We use the total number of the Spring Festival greetings to measure social network. Based on the extended Mincer model, this paper uses RUMiC2010 rural- urban migration survey data, to examine the impact of social networks on the wages of migrant workers by using ordinary least squares method, instrumental variable method and quantile regression method.The main conclusions of this paper are as follows. First, in the control of gender, age, level of education, experience and other variables, it shows that social networks have a significantly positive effect on the wages of migrant workers. After selecting the number of brothers and sisters and whether the migrant worker had gifts spending on weddings and funerals or not as instrumental variables to deal with the endogeneity problem, the results remain robust, which proves that social networks indeed have a positive effect on the wage level of migrant workers. Second, the effect is larger especially for migrant workers with lower level of education. Also, migrant workers with different income levels have different return rates of social networks, which means, the higher the income level, the larger return rate of social networks. Finally, this paper provides relevant policy suggestions about how to improve migrant workers’ wages and advance them blend into city.