IDEAS home Printed from https://ideas.repec.org/a/spr/ijlaec/v62y2019i2d10.1007_s41027-019-00178-5.html
   My bibliography  Save this article

Emerging Dynamics of Labour Market Inequality in India: Migration, Informality, Segmentation and Social Discrimination

Author

Listed:
  • Ravi Srivastava

    (Institute of Human Development)

Abstract

Evidence for three decades or more indicates that wage inequality has consistently increased in most labour market segments in India. This paper focuses on how informalisation, migration, segmentation, and social discrimination, which operate most significantly at the lower end of the labour market, have contributed to well-being deficits and rising labour market inequality. There is a large and growing wage gap between formal and informal workers in the organised sector after controlling for other characteristics of the workers. On average, workers who are allocated formal or informal work in the organised sector have very similar characteristics. Across both formal and informal work, while education and experience improves wages, female and low-social-status workers have lower wages, controlling for other characteristics. This paper argues that seasonal and circular labour migrants form a growing segment of the informally employed. Poor and low-caste workers form a disproportionate proportion of such workers. Seasonal/circular migrant workers usually form the lowest rung of labour at organised sector work sites. They are segmented and fragmented by the recruitment process and along lines of caste, sex, ethnicity, language and region. This segmentation and fragmentation creates the basis for capital to acquire low-cost, highly flexible labour, who work long hours and take up the most dangerous work. This paper shows that the process of labour segmentation in Indian labour markets builds on well-entrenched processes of social discrimination but has assumed new forms as the workforce has become more mobile and informalised. Gender-based labour segmentation builds on the culturally determined social reproduction responsibilities of female workers and other socio-cultural factors. This paper concludes that while the above processes are linked to the underlying dynamics of capitalist growth in India, more equitable labour market outcomes at the bottom of the pyramid can be achieved through the provision of suitable social protection, sensible labour market regulation and a more comprehensive anti-discrimination framework.

Suggested Citation

  • Ravi Srivastava, 2019. "Emerging Dynamics of Labour Market Inequality in India: Migration, Informality, Segmentation and Social Discrimination," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(2), pages 147-171, June.
  • Handle: RePEc:spr:ijlaec:v:62:y:2019:i:2:d:10.1007_s41027-019-00178-5
    DOI: 10.1007/s41027-019-00178-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s41027-019-00178-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s41027-019-00178-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chamarbagwala, Rubiana, 2006. "Economic Liberalization and Wage Inequality in India," World Development, Elsevier, vol. 34(12), pages 1997-2015, December.
    2. Deshpande, Ashwini & Goel, Deepti & Khanna, Shantanu, 2018. "Bad Karma or Discrimination? Male–Female Wage Gaps Among Salaried Workers in India," World Development, Elsevier, vol. 102(C), pages 331-344.
    3. Simon Deakin, 2013. "Addressing Labour Market Segmentation: The Role of Labour Law," Working Papers wp446, Centre for Business Research, University of Cambridge.
    4. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    5. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 715-753.
    6. Becker, Gary S, 1993. "Nobel Lecture: The Economic Way of Looking at Behavior," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 385-409, June.
    7. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    8. repec:ilo:ilowps:483335 is not listed on IDEAS
    9. Azam, Mehtabul, 2012. "Changes in Wage Structure in Urban India, 1983–2004: A Quantile Regression Decomposition," World Development, Elsevier, vol. 40(6), pages 1135-1150.
    10. Majumder, Rajarshi, 2007. "Earning Differentials Across Social Groups: Evidences from India," MPRA Paper 12811, University Library of Munich, Germany.
    11. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, June.
    12. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    13. 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.
    14. Deakin, S. F., 2013. "Addressing labour market segmentation : the role of labour law," ILO Working Papers 994834483402676, International Labour Organization.
    15. Reich, Michael & Gordon, David M & Edwards, Richard C, 1973. "A Theory of Labor Market Segmentation," American Economic Review, American Economic Association, vol. 63(2), pages 359-365, May.
    16. Papola, T. S.,, 2013. "Role of labour regulation and reforms in India : country case study on labour market segregation," ILO Working Papers 994833353402676, International Labour Organization.
    17. Kijima, Yoko, 2006. "Why did wage inequality increase? Evidence from urban India 1983-99," Journal of Development Economics, Elsevier, vol. 81(1), pages 97-117, October.
    18. Cain, Glen G, 1976. "The Challenge of Segmented Labor Market Theories to Orthodox Theory: A Survey," Journal of Economic Literature, American Economic Association, vol. 14(4), pages 1215-1257, December.
    19. Vani Borooah & Sriya Iyer, 2005. "Vidya, Veda, and Varna: The influence of religion and caste on education in rural India," Journal of Development Studies, Taylor & Francis Journals, vol. 41(8), pages 1369-1404.
    20. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-243, May.
    21. 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.
    22. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    23. repec:ilo:ilowps:483448 is not listed on IDEAS
    24. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
    25. Mukherjee, Dipa & Majumder, Rajarshi, 2011. "Occupational Pattern, Wage Rates and Earning Disparities in India: A Decomposition Analysis," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 46(1), pages 131-152.
    26. Piore, Michael J, 1983. "Labor Market Segmentation: To What Paradigm Does It Belong?," American Economic Review, American Economic Association, vol. 73(2), pages 249-253, May.
    27. Priya Deshingkar & Pramod Sharma & Sushil Kumar & Shaheen Akter & John Farrington, 2008. "Circular migration in Madhya Pradesh: changing patterns and social protection needs," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(4), pages 612-628.
    28. Leontaridi, Marianthi Rannia, 1998. "Segmented Labour Markets: Theory and Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 12(1), pages 63-101, February.
    29. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amrita Datta, 2020. "Circular Migration and Precarity: Perspectives from Rural Bihar," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(4), pages 1143-1163, December.
    2. Ishwar Awasthi & Balwant Singh Mehta, 2020. "Forced Out-Migration from Hill Regions and Return Migration During the Pandemic: Evidence from Uttarakhand," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(4), pages 1107-1124, December.
    3. Ravi Srivastava, 2020. "Labour Migration, Vulnerability, and Development Policy: The Pandemic as Inflexion Point?," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(4), pages 859-883, December.
    4. Deepak K. Mishra, 2020. "Seasonal Migration and Unfree Labour in Globalising India: Insights from Field Surveys in Odisha," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(4), pages 1087-1106, December.
    5. Priyansha Singh & Chitra Rawat & Varun Aggarwal & Manish Maskara, 2020. "“Employers” in a Migrant Intensive Industry: Organised Construction in Thane, Maharashtra," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(4), pages 1183-1201, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Satinder Singh & J. K. Parida & I. C. Awasthi, 2020. "Employability and Earning Differentials Among Technically and Vocationally Trained Youth in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(2), pages 363-386, June.
    2. Zhang, Li & Sharpe, Rhonda Vonshay & Li, Shi & Darity, William A., 2016. "Wage differentials between urban and rural-urban migrant workers in China," China Economic Review, Elsevier, vol. 41(C), pages 222-233.
    3. Singhari, Smrutirekha & Madheswaran, S., 2016. "Social exclusion and caste discrimination in public and private sectors in India: A decomposition analysis," Working Papers 361, Institute for Social and Economic Change, Bangalore.
    4. Satinder Singh & J. K. Parida & I. C. Awasthi, 0. "Employability and Earning Differentials Among Technically and Vocationally Trained Youth in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 0, pages 1-24.
    5. Shiney Chakraborty, 2020. "Gender Wage Differential in Public and Private Sectors in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(3), pages 765-780, September.
    6. Chen, Yiu Por (Vincent) & Zhang, Yuan, 2018. "A decomposition method on employment and wage discrimination and its application in urban China (2002–2013)," World Development, Elsevier, vol. 110(C), pages 1-12.
    7. S. Madheswaran & Smrutirekha Singhari, 2016. "Social exclusion and caste discrimination in public and private sectors in India: A decomposition analysis," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 59(2), pages 175-201, June.
    8. Günalp, Burak & Cilasun, Seyit Mümin & Acar, Elif Öznur, 2013. "Male-Female Labor Market Participation and the Extent of Gender-Based Wage Discrimination in Turkey," MPRA Paper 51503, University Library of Munich, Germany.
    9. Tushar Agrawal, 2014. "Gender and caste-based wage discrimination in India: some recent evidence [Geschlecht und Kaste-ansässige Lohndiskriminierung in Indien: Einige Neue Beweise]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 47(4), pages 329-340, December.
    10. Niels-Hugo Blunch & Nabanita Datta Gupta, 2014. "Social Networks and Health Knowledge in India: Who You Know or Who You Are?," Economics Working Papers 2014-24, Department of Economics and Business Economics, Aarhus University.
    11. Günalp, Burak & Cilasun, Seyit Mümin & Acar, Elif Öznur, 2013. "Male-Female Labor Market Participation and the Extent of Gender-Based Wage Discrimination in Turkey," MPRA Paper 51503, University Library of Munich, Germany.
    12. Gomes, Magno Rogério & Souza, Solange de Cássia Inforzato de & Mantovani, Gabriela Gomes & Paiva, Vanessa Fortunato de, 2020. "Wage gap decomposition models: A methodological contribution," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 39(2), March.
    13. Gomes, Magno Rogério & Souza, Solange de Cássia Inforzato de & Mantovani, Gabriela Gomes & Paiva, Vanessa Fortunato de, 2019. "Wage gap decomposition models: A methodological contribution," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 39(2).
    14. Sami Napari, 2008. "The Early‐career Gender Wage Gap among University Graduates in the Finnish Private Sector," LABOUR, CEIS, vol. 22(4), pages 697-733, December.
    15. Garcia-Aracil, Adela & Winter, Carolyn, 2006. "Gender and ethnicity differentials in school attainment and labor market earnings in Ecuador," World Development, Elsevier, vol. 34(2), pages 289-307, February.
    16. Deshpande, Ashwini & Goel, Deepti & Khanna, Shantanu, 2018. "Bad Karma or Discrimination? Male–Female Wage Gaps Among Salaried Workers in India," World Development, Elsevier, vol. 102(C), pages 331-344.
    17. Tim Leunig & Maria Stanfors, 2010. "Piece-rates and prosperity: evidence from the late nineteenth-century tobacco industry," Working Papers 10003, Economic History Society.
    18. Niels-Hugo Blunch, 2018. "Just like a woman? New comparative evidence on the gender income gap across Eastern Europe and Central Asia," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-41, December.
    19. Hanewald, Katja & Jia, Ruo & Liu, Zining, 2021. "Why is inequality higher among the old? Evidence from China," China Economic Review, Elsevier, vol. 66(C).
    20. Karen Mumford & Cristina Sechel, 2020. "Pay and Job Rank among Academic Economists in the UK: Is Gender Relevant?," British Journal of Industrial Relations, London School of Economics, vol. 58(1), pages 82-113, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:ijlaec:v:62:y:2019:i:2:d:10.1007_s41027-019-00178-5. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.