IDEAS home Printed from https://ideas.repec.org/a/spr/ijlaec/v65y2022i1d10.1007_s41027-022-00355-z.html
   My bibliography  Save this article

Does Services Sector Encourage Migration and Reduce Poverty?

Author

Listed:
  • Arup Mitra

    (Delhi University Enclave)

Abstract

Based on the cross-sectional data, this study examines the role of the services sector in the context of migration from the rural to the urban areas. The dominance of the services sector in the urban setup seems to be working as a pull factor. While industrialisation is seen to encourage migration, the three-equation-recursive model estimated in our study clearly brings out the positive role of the services sector in explaining the variations in the migration rate and the urban per capita consumption expenditure (a proxy for earnings), which in turn reduces urban poverty significantly. The popular belief is that migration transfers rural poverty into the urban domain, polluting the quality of city life. But our results bring out the positive role that migration plays in reducing poverty. This is indeed an important and cost-effective mechanism compared to the direct cash-transfer and employment guarantee programmes adopted in the rural context. At the heart of this entire dynamics, there lies, however, the crucial role that the services sector plays in encouraging migration and reducing poverty.

Suggested Citation

  • Arup Mitra, 2022. "Does Services Sector Encourage Migration and Reduce Poverty?," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(1), pages 1-18, March.
    • Handle: RePEc:spr:ijlaec:v:65:y:2022:i:1:d:10.1007_s41027-022-00355-z
    DOI: 10.1007/s41027-022-00355-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s41027-022-00355-z
    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/s41027-022-00355-z?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. Mortensen, D. T. & Vishwanath, T., 1995. "Personal contacts and earnings: It is who you know!," Labour Economics, Elsevier, vol. 2(1), pages 103-104, March.
    2. Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1056-1093, December.
    3. Udall, Alan T, 1976. "The Effects of Rapid Increases in Labor Supply on Service Employment in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 24(4), pages 765-785, July.
    4. Arup Mitra, 2004. "Informal Sector, Networks And Intra†City Variations In Activities: Findings From Delhi Slums," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 16(2), pages 154-169, July.
    5. Barry Eichengreen & Poonam Gupta, 2013. "The two waves of service-sector growth," Oxford Economic Papers, Oxford University Press, vol. 65(1), pages 96-123, January.
    6. Kono, Hisaki, 2006. "Employment with connections: Negative network effects," Journal of Development Economics, Elsevier, vol. 81(1), pages 244-258, October.
    7. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-1418, December.
    8. Arjan de Haan & Karen Brock & Ngolo Coulibaly, 2002. "Migration, Livelihoods and Institutions: Contrasting Patterns of Migration in Mali," Journal of Development Studies, Taylor & Francis Journals, vol. 38(5), pages 37-58.
    9. K.V. Ramaswamy & Tushar Agrawal, 2012. "Services-led growth, employment and job quality: A Study of manufacturing and service-sector in urban India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2012-007, Indira Gandhi Institute of Development Research, Mumbai, India.
    10. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    11. Mukherjee, Arpita, 2013. "The Service Sector in India," ADB Economics Working Paper Series 352, Asian Development Bank.
    12. Nancy Luke & Kaivan Munshi, 2006. "New Roles for Marriage in Urban Africa: Kinship Networks and the Labor Market in Kenya," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 264-282, May.
    13. Arup Mitra, 1992. "Urban Poverty: A Rural Spill-Over?," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 27, pages 403-419.
    14. Arup Mitra, 2013. "Insights into Inclusive Growth, Employment and Wellbeing in India," Springer Books, Springer, edition 127, number 978-81-322-0656-9, December.
    15. Kaivan Munshi & Mark Rosenzweig, 2006. "Traditional Institutions Meet the Modern World: Caste, Gender, and Schooling Choice in a Globalizing Economy," American Economic Review, American Economic Association, vol. 96(4), pages 1225-1252, September.
    Full references (including those not matched with items on IDEAS)

    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. Arup Mitra, 2020. "Services Sector in India: Does It Contribute to Population Movement and Poverty Reduction?," IEG Working Papers 401, Institute of Economic Growth.
    2. Arup Mitra, 2010. "Migration, Livelihood and Well-being: Evidence from Indian City Slums," Urban Studies, Urban Studies Journal Limited, vol. 47(7), pages 1371-1390, June.
    3. Arup Mitra & Basanta K Pradhan, 2016. "Migration, Remittances, and Changing Patterns of Livelihood Evidence from Western Odisha Villages," IEG Working Papers 363, Institute of Economic Growth.
    4. Arimoto, Yutaka & Machikita, Tomohiro & Tsubota, Kenmei, 2018. "Broker versus social networks in adverse working conditions: cross-sectional evidence from Cambodian migrants in Thailand," IDE Discussion Papers 686, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. Nicoletta Berardi, 2013. "Social networks and wages in Senegal’s labor market," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-26, December.
    6. Mehmet Bac & Eren Inci, 2010. "The Old‐Boy Network and the Quality of Entrepreneurs," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(4), pages 889-918, December.
    7. Mitra, Arup & Tsujita, Yuko, 2014. "Dimensions and determinants of upward mobility : a study based on longitudinal data from Delhi slums," IDE Discussion Papers 448, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    8. Adnan Q. Khan & Steven F. Lehrer, 2013. "The Impact of Social Networks on Labour Market Outcomes: New Evidence from Cape Breton," Canadian Public Policy, University of Toronto Press, vol. 39(s1), pages 1-24, May.
    9. Amrita Dhillon & Vegard Iversen & Gaute Torsvik, 2021. "Employee Referral, Social Proximity, and Worker Discipline: Theory and Suggestive Evidence from India," Economic Development and Cultural Change, University of Chicago Press, vol. 69(3), pages 1003-1030.
    10. Dariel, Aurelie & Riedl, Arno & Siegenthaler, Simon, 2021. "Referral hiring and wage formation in a market with adverse selection," Games and Economic Behavior, Elsevier, vol. 130(C), pages 109-130.
    11. Zenou, Yves, 2011. "Spatial versus Social Mismatch: The Strength of Weak Ties," Research Papers in Economics 2011:5, Stockholm University, Department of Economics.
    12. Ian M. Schmutte, 2015. "Job Referral Networks and the Determination of Earnings in Local Labor Markets," Journal of Labor Economics, University of Chicago Press, vol. 33(1), pages 1-32.
    13. Yves Zenou, 2015. "A Dynamic Model of Weak and Strong Ties in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 33(4), pages 891-932.
    14. Mano, Yukichi & Yamano, Takashi & Suzuki, Aya & Matsumoto, Tomoya, 2011. "Local and Personal Networks in Employment and the Development of Labor Markets: Evidence from the Cut Flower Industry in Ethiopia," World Development, Elsevier, vol. 39(10), pages 1760-1770.
    15. Andrea Galeotti & Luca Paolo Merlino, 2014. "Endogenous Job Contact Networks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(4), pages 1201-1226, November.
    16. Lorenzo Cappellari & Konstantinos Tatsiramos, 2010. "Friends’ Networks and Job Finding Rates," DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro ieil0059, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    17. Stupnytska, Yuliia & Zaharieva, Anna, 2015. "Explaining U-shape of the referral hiring pattern in a search model with heterogeneous workers," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 211-233.
    18. Junfu Zhang & Zhong Zhao, 2015. "Social-family network and self-employment: evidence from temporary rural–urban migrants in China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-21, December.
    19. Casella, Alessandra & Hanaki, Nobuyuki, 2008. "Information channels in labor markets: On the resilience of referral hiring," Journal of Economic Behavior & Organization, Elsevier, vol. 66(3-4), pages 492-513, June.
    20. Emanuela Ghignoni, 2016. "The ?great escape? from Italian Universities: Do labour market recruitment channels matter?," QUADERNI DI ECONOMIA DEL LAVORO, FrancoAngeli Editore, vol. 2016(106), pages 49-75.

    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:65:y:2022:i:1:d:10.1007_s41027-022-00355-z. See general information about how to correct material in RePEc.

    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. RePEc uses bibliographic data supplied by the respective publishers.