The informal labour market in India : transitory or permanent employment for migrants?
The informal economy is a very important sector of the Indian economy. The National Council of Applied Economic Research estimates that the informal sector - "unorganised sector" - generates about 62% of GDP and provides for about 55% of total employment (ILO 2002, p. 14). This paper studies the characteristics of the workers in the informal economy and whether internal migrants treat this sector as a temporary location before moving on to the organised or formal sector to improve their lifetime income and living conditions. 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 poorer households, and/or are in lower social groups (castes and religions) are more likely to be in the informal sector. In addition, our results show strong evidence that the longer a rural migrant household head has been working in the urban sector, ceteris paribus, the more likely that individual has moved out of the informal wage sector. These results support the hypothesis that, for internal migrants, the informal wage labour market is a stepping stone to a better and more certain life in the formal sector.
|Date of creation:||Mar 2014|
|Date of revision:|
|Publication status:||Published in IDE Discussion Paper. No. 461. 2014.3|
|Contact details of provider:|| Postal: 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545|
Web page: http://www.ide.go.jp/
More information through EDIRC
|Order Information:|| Postal: Publication Office, IDE 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545 JAPAN|
Web: http://www.ide.go.jp/English/Publish/Order Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bennett, John & Rablen, Matthew D., 2012.
"Self-Employment, Wage Employment and Informality in a Developing Economy,"
IZA Discussion Papers
6406, Institute for the Study of Labor (IZA).
- John Bennett & Matthew D. Rablen, 2015. "Self-employment, wage employment, and informality in a developing economy," Oxford Economic Papers, Oxford University Press, vol. 67(2), pages 227-244.
- 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.
- 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.
- Takahiro Ito, 2007. "Caste Discrimination and Transaction Costs in the Labor Market: Evidence from Rural North India," Hi-Stat Discussion Paper Series d06-200, Institute of Economic Research, Hitotsubashi University.
- Calvó-Armengol, Antoni & Zenou, Yves, 2001.
"Job Matching, Social Network and Word-of-Mouth Communication,"
695, Stockholm University, Institute for International Economic Studies.
- Calvo-Armengol, Antoni & Zenou, Yves, 2005. "Job matching, social network and word-of-mouth communication," Journal of Urban Economics, Elsevier, vol. 57(3), pages 500-522, May.
- Calvó-Armengol, Antoni & Zenou, Yves, 2003. "Job Matching, Social Network and Word-of-Mouth Communication," IZA Discussion Papers 771, Institute for the Study of Labor (IZA).
- Calvó-Armengol, Antoni & Zenou, Yves, 2001. "Job Matching, Social Network and Word-of-Mouth Communication," CEPR Discussion Papers 2797, C.E.P.R. Discussion Papers.
- David Mckenzie & Hillel Rapoport, 2004.
"Network Effects and the Dynamics of Migration and Inequality: Theory and Evidence from Mexico,"
2004-3, Bar-Ilan University, Department of Economics.
- Mckenzie, David & Rapoport, Hillel, 2007. "Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico," Journal of Development Economics, Elsevier, vol. 84(1), pages 1-24, September.
- McMillan, Margaret & Rodrik, Dani, 2012.
"Globalization, structural change, and productivity growth:,"
IFPRI discussion papers
1160, International Food Policy Research Institute (IFPRI).
- Margaret S. McMillan & Dani Rodrik, 2011. "Globalization, Structural Change and Productivity Growth," NBER Working Papers 17143, National Bureau of Economic Research, Inc.
- David J. McKenzie & Nicole Hildebrandt, 2005.
"The Effects of Migration on Child Health in Mexico,"
ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION,
ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2005), pages 257-289, August.
- Hildebrandt, Nicole & McKenzie, David, 2005. "The effects of migration on child health in Mexico," Policy Research Working Paper Series 3573, The World Bank.
- Klarita Gërxhani, 2004. "The Informal Sector in Developed and Less Developed Countries: A Literature Survey," Public Choice, Springer, vol. 120(3_4), pages 267-300, 09.
- Amemiya, Takeshi, 1978. "The Estimation of a Simultaneous Equation Generalized Probit Model," Econometrica, Econometric Society, vol. 46(5), pages 1193-1205, September.
- Holzer, Harry J, 1987.
"Informal Job Search and Black Youth Unemployment,"
American Economic Review,
American Economic Association, vol. 77(3), pages 446-52, June.
- McKenzie, David & Rapoport, Hillel, 2006.
"Can migration reduce educational attainment ? Evidence from Mexico,"
Policy Research Working Paper Series
3952, The World Bank.
- David McKenzie & Hillel Rapoport, 2011. "Can migration reduce educational attainment? Evidence from Mexico," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1331-1358, October.
- Rauch, James E., 1991. "Modelling the informal sector formally," Journal of Development Economics, Elsevier, vol. 35(1), pages 33-47, January.
- 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.
- Bromley, Ray, 1978. "Introduction - the urban informal sector: Why is it worth discussing?," World Development, Elsevier, vol. 6(9-10), pages 1033-1039.
- 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.
When requesting a correction, please mention this item's handle: RePEc:jet:dpaper:dpaper461. 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: (Marie Kobayashi)
If references are entirely missing, you can add them using this form.