Kinship Pressure and Firm-Worker Matching Distortions

Research Note
Published on 18 October 2023


Many small businesses in low-income countries hire employees from their kinship networks. This fact is often attributed to hiring from the kinship network reducing contracting frictions or informational asymmetries. In this paper, I test for the possibility that some of this hiring is due to redistributive pressure: i.e. that firm owners face a social cost when they do not choose a relative employee for a job. I run a field experiment with small firms in Zambia to test this hypothesis, and find that firms are less likely to hire their relatives when they are offered plausible deniability for not doing so.


Nicholas Swanson

University of California, Berkeley