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Consequences of Labour Migration on Wages and Employment: Evidence from India

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  • Mohd Imran Khan

    (NMIMS)

Abstract

This paper evaluates the impact of migration on the labour market outcomes of non-migrant workers in India using unit-level data from the ‘Employment Unemployment and Migration Survey’ (NSSO 64th Round, 2007–2008). After correcting for endogeneity bias of migration using an instrument variable approach, the overall results of the study suggest that the inflow of migrant workers increases the wages of non-migrant workers but does not affect their employment. Disaggregating the analysis by sectors, the study finds a positive wage effect in the formal sector, which is more pronounced among the high-skilled workers. In the informal sector, the results indicate an adverse employment effect among both high- and low-skilled workers. The positive wage effect in the formal sector suggests complementarity between migrant and non-migrant workers. The adverse employment effect in the informal sector is possibly due to a preference for migrant workers over non-migrant workers. The estimated results are consistent with alternate specifications.

Suggested Citation

  • Mohd Imran Khan, 2021. "Consequences of Labour Migration on Wages and Employment: Evidence from India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(1), pages 23-47, March.
    • Handle: RePEc:spr:ijlaec:v:64:y:2021:i:1:d:10.1007_s41027-020-00294-7
    DOI: 10.1007/s41027-020-00294-7
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    More about this item

    Keywords

    Internal labour migration; Urban labour markets; Formal and informal sectors;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market

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