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The Informal Labour Market in India: Transitory or Permanent Employment for Migrants?

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  • Junankar, Pramod N. (Raja)

    ()
    (University of New South Wales)

  • Shonchoy, Abu

    ()
    (Institute of Developing Economies (IDE-JETRO))

Abstract

This paper studies the characteristics of the workers in the informal economy and whether migrants treat this sector as a temporary location before moving on to the organised or formal sector to improve their life time income and life style. We limit our study to the Indian urban (non-Agricultural) sector and study the characteristics of the household heads that belong to the Informal Sector (Self Employed and Informal Wage Workers) and the Formal Sector. We find that household heads that are less educated, come from the poorer households, lower social groups (castes and religions) are more likely to be in the informal sector. We distinguish between migrants who come from rural areas and urban areas to their present urban location. We find that the longer duration of a rural migrant in the urban area, the lower the probability that the household head would be in the informal wage labour sector.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7587.

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Length: 38 pages
Date of creation: Aug 2013
Date of revision:
Publication status: published in: IZA Journal of Labor & Development, 2014, 3:9
Handle: RePEc:iza:izadps:dp7587

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Keywords: caste; informal labour markets; migrant; religion;

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  1. John Bennett & Matthew Rablen, 2012. "Self-Employment, Wage Employment and Informality in a Developing Economy," CEDI Discussion Paper Series 12-02, Centre for Economic Development and Institutions(CEDI), Brunel University.
  2. Ito, Takahiro, 2009. "Caste discrimination and transaction costs in the labor market: Evidence from rural North India," Journal of Development Economics, Elsevier, vol. 88(2), pages 292-300, March.
  3. Holzer, Harry J, 1987. "Informal Job Search and Black Youth Unemployment," American Economic Review, American Economic Association, vol. 77(3), pages 446-52, June.
  4. Randall S. Brown & Marilyn Moon & Barbara S. Zoloth, 1980. "Incorporating Occupational Attainment in Studies of Male-Female Earnings Differentials," Journal of Human Resources, University of Wisconsin Press, vol. 15(1), pages 3-28.
  5. David Mckenzie & Hillel Rapoport, 2004. "Network Effects and the Dynamics of Migration and Inequality: Theory and Evidence from Mexico," Working Papers 2004-3, Bar-Ilan University, Department of Economics.
  6. Rauch, James E., 1991. "Modelling the informal sector formally," Journal of Development Economics, Elsevier, vol. 35(1), pages 33-47, January.
  7. Calvó-Armengol, Antoni & Zenou, Yves, 2001. "Job Matching, Social Network and Word-of-Mouth Communication," Seminar Papers, Stockholm University, Institute for International Economic Studies 695, Stockholm University, Institute for International Economic Studies.
  8. Klarita G�rxhani, 2004. "The Informal Sector in Developed and Less Developed Countries: A Literature Survey," Public Choice, Springer, vol. 120(3_4), pages 267-300, 09.
  9. David J. McKenzie & Nicole Hildebrandt, 2005. "The Effects of Migration on Child Health in Mexico," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  10. Amemiya, Takeshi, 1978. "The Estimation of a Simultaneous Equation Generalized Probit Model," Econometrica, Econometric Society, Econometric Society, vol. 46(5), pages 1193-1205, September.
  11. Banerjee, Biswajit & Knight, J. B., 1985. "Caste discrimination in the Indian urban labour market," Journal of Development Economics, Elsevier, vol. 17(3), pages 277-307, April.
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