Short term migrants in India: Characteristics, wages and work transition

Abstract

With 53 percent of India's labour force still engaged in agriculture it is apparent that India has not witnessed a reduction in the share of population working in agriculture. This is primarily because in the two decades of economic reforms, beginning the nineties, adequate new jobs were not created in other sectors of the economy. With rural unemployment rates being sticky, the phenomenon of short term migration has become important in rural India. This paper uses a nationally representative data on migration to examine the characteristics of short term migrants. Since the spatial distribution of jobs is an important determinant of the decision of migrate we compute the location quotient to identify whether a district has a higher concentration of workers in agriculture, manufacturing, construction and services sector. After controlling for household and individual characteristics, we find that an individual is more likely to be a short term migrant if the individual is from a district with a higher concentration of workers in the construction industry. Using instrumental variable model, we find that short term migrants earn low wages compared to non-short term migrant. Following this we model the transition of short term migrant workers across industries drawing on the literature on transition measures developed to measure income and occupational mobility.