Labour Migration and Risk in India

Abstract

Internal migration has been a cause of concern and is rampant across India. While migration is a complex issue affected by many different factors, temporal variation in rainfall assumes significant importance as a risk in the rural areas of developing countries. Also important in this context are network effects that reduce the inherent risk at a new destination. Following the theory proposed by the New Economics of Labour Migration, this study investigates the role of risk at origin and risk at destination on a household’s propensity to temporarily and permanently migrate. The study matches household-level migration data from the 64th round of NSS and data with the daily gridded rainfall dataset of 1° ×1° (latitude and longitude) resolution recently released from the Indian Meteorological Department. Risk management behavior of households as a form of coping mechanism in rural areas from where migration for livelihood reasons is incentivized through the agriculture channel is studied by an all-India cross-sectional analysis for 2007-08. Proportion data pertaining to migration propensities of households is estimated using a fractional logit as base model, as well as an ordered logit model. Further, count data pertaining to number of migrant family members in a household is estimated by a poisson regression model. In all specifications, temporal variation in rainfall is found to be a statistically significant factor affecting temporary migration and inter-district permanent migration from rural areas. This variation in rainfall is found not to explain intra-district or inter-state permanent migration. These findings are consistent with the expectations of the study. Due to partial capturing of network effects, they are found to explain intra-district and inter-district migration only. The results of the study make a strong case for risk at origin as an important factor inducing temporary migration and inter-district permanent migration of households from the rural areas of India.