Friday, March 11, 2016

Labour mobility in India

I am not really of this but interesting if correct.
Why is labor mobility in India so low?: "Migration from rural areas of India to the city is surprisingly low compared with other large developing countries, leaving higher paying job opportunities unexploited. This research shows that well-functioning rural insurance networks are in part responsible for this misallocation in the labor market, creating incentives that keep adult males in the village."

1 comment:

L said...

Is this true? There has been some evidence that migration to tier one cities has decreased, but has increased into tier 2 & 3 towns; and this is attributed to the poor quality of life in Mumbai, Delhi etc for migrants.There is some evidence that reverse migration occurs from these metros and instead people move to towns and tier 2 cities.Seems contradictory to what one hears usually, but then I am just a layman.

Missing Men, Migration and Labor Markets: Evidence from India Chinmay Tumbe∗ June 2014
How do labor markets function when a large part of the able-bodied male workforce is absent due to out-migration? This question holds great significance as it affects regions coveringover200millionpeopleinIndiaandmanyotherpartsoftheworld. Inthispaper, we analyze individual and district level data on internal and international migration, remittances, sex ratios and labor market variables in India from the perspective of the migrant’s source region and find that the ‘missing men’ phenomenon is associated with (a) Feminization of the agricultural workforce (b) Higher levels of male employment in the construction and rural non-farm services sector and (c) Higher rural wages for males due to tighter labor markets. We argue that these associations are likely to be causal in nature through an instrumental variable strategy that employs historic migration networksthatevolvedinthelatenineteenthcenturyasinstrumentsforcurrentmigration