Contract Labour, Job Quality and Turnover Intention—Evidence From Nigeria

Abstract

Labour contracting, where intermediaries provide farmers with migrant workers, plays a central role in meeting the demand for seasonal labour on labour‐intensive farms. Yet this system poses underresearched challenges for both workers and farmers. A few studies, mostly qualitative, link labour contracting to exploitative conditions, raising concerns about workers' welfare (Sustainable Development Goal 8). However, poor working conditions are widespread in agriculture, and notably, quantitative comparisons between contract and non‐contract workers are lacking. For farmers, these precarious conditions pose a production risk if they lead to higher turnover. However, such links have so far been mainly documented in high‐skilled settings. Here, we address these gaps and provide the first empirical evidence on the links between contract labour, job quality and turnover intention. We use matched worker–employer survey data, rarely available in agricultural research, complemented with qualitative insights from a well‐suited case study: Nigeria's labour‐intensive tomato sector, where farmers recruit workers through personal networks and labour contractors. Using decomposition analysis—commonly used to examine gender gaps—in a novel way, we assess disparities in working conditions between contract and non‐contract workers. Our findings show that contract labour is associated with structural disparities in working conditions. Complementary qualitative insights show how rules, norms and practices embedded in labour contracting systems contribute to these structural inequalities. Paradoxically, despite poorer conditions, contract workers report job satisfaction levels similar to non‐contract workers—likely reflecting limited alternatives. Consequently, turnover intentions are comparable across both groups, with job satisfaction being the primary driver of turnover intentions.