The informal labour market in India: transitory or permanent employment for migrants?

Abu Shonchoy and Pramod (Raja) Junankar

No 461, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: 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.

Keywords: Labor market; Informal sector; Migrant labor; Caste; Religion; Informal labour markets; Migrant (search for similar items in EconPapers)
JEL-codes: J15 J42 J61 O17 (search for similar items in EconPapers)
Date: 2014-03-01
New Economics Papers: this item is included in nep-dev, nep-iue, nep-lab and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 461. 2014-03-01

Downloads: (external link)
https://ir.ide.go.jp/record/37714/files/IDP000461_001.pdf First version, 2014 (application/pdf)

Related works:
Journal Article: The informal labour market in India: transitory or permanent employment for migrants? (2014)
Working Paper: The Informal Labour Market in India: Transitory or Permanent Employment for Migrants? (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jet:dpaper:dpaper461

Ordering information: This working paper can be ordered from
Publication Office, IDE 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545 JAPAN
http://www.ide.go.jp/English/Publish/Order

Access Statistics for this paper

More papers in IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO) Contact information at EDIRC.
Bibliographic data for series maintained by Michitaka Imamitsu ().