Migration in India under structural transformation

Purpose - This study aims to answer if inter-state migrants in India play a more active role than their intra-state counterparts in labor force participation and entrepreneurship. Design/methodology/approach - A recursive bivariate probit model is used with an instrumental variable (IV) of the total of inter-state migrants in a city over their historical numbers to tackle the endogeneity issue of the migration decision of the migrants. Findings - Inter-state migrants did a better job than their intra-state counterparts in labor force participation and female inter-state migrants did a better job than their counterparts in wage employment and being day laborers. Research limitations/implications - The data are from IPUMS and there is no updated nationwide data regrading migration and employment for recent years. Practical implications - A randomized controlled trail can be carried out near the borders of two states where there are both significant amounts of inter-state and intra-state migrants. Social implications - The government and international organizations shall focus on cultivating the skills of the female migrants as well as encouraging the entrepreneurship of both types of migrants. Originality/value - The study focus is on the comparison between intra- and inter-state migrants based on nationwide survey data and the usage of recursive bivariate model and an effective Instrumental Variable.