Rural-to-Urban Migration and the Urban Labour Market: the Case of India

Abstract

In relation to urbanization, findings suggest that the unemployment rate after migration tends to decline. States with higher urbanization levels reveal a larger increase in regular wage employment after migration. With an increase in city size, the migration rate rises mainly because employment prospects are better in large cities due to agglomeration effects. Migration, urban informal sector employment, and the proportion of the Scheduled Caste population in urban and rural areas are all positively associated, suggesting that the socially backward groups are more likely to migrate from rural areas and get absorbed in the urban informal sector. This pattern is accompanied by a decline in the incidence of poverty in both rural and urban areas: even the urban informal sector activities are able to provide relatively better job opportunities and higher living standards.