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Labour Markets

Rural to Urban Migration and Urban Labour Market

Author : Arup Mitra | 2016
Published By: National Institute of Labour Economics, Research and Development

Rural to urban migration in the Indian context is not exceptionally high if we consider the aggregate rates for all urban areas. However, when it comes to large cities , the rates tend to be higher. In relation to urbanization findings suggest that as the percentage of population residing in urban areas rises , the greater is the decline in the unemployment rate after migration in comparison to the rate that prevail ed prior to migration. States with higher urbanization levels reveal a larger increase in regular wage employment after migration. The migration rate in urban areas and the urbanization level are positively associated – very moderately though. With an increase in city size , the migration rate rises mainly because employment prospects are better in large cities due to agglomeration effects . The share of regular wage employment is highest in the million-plus cities and the least in smaller cities, whereas casual employment a nd self-employment follow just the opposite pattern. Migration, urban informal sector employment, and the proportion of Scheduled Caste population in the urban and rural areas are all positively associated , suggesting that the socially backward groups are more likely to migrate from the rural areas and get absorbed in the urban informal sector. But t his 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. On the whole, urbanisation and migration show beneficial effects in terms of reduction in both rural and urban poverty as Labour market outcomes tend to improve. However, this process is not strongly evident and hence, more policy interventions are required in order to boost the beneficial effects of urbanisation.

URL : http://iamrindia.gov.in/writereaddata/UploadFile/Urban%20Migration.pdf

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