Oil prices and employment in the transport sector

Abstract

The impact of macroeconomic shocks, viz. rise in oil price on the sub-national wages of unorganized sector workers is little discussed in the literature. This chapter uses three rounds of unit level data to show that moving from formal to informal facilities in the large transport sector in India is generally penalizing the workers, albeit, higher educational qualification of the individual helps to raise real wages. Rise in oil price may lead to contraction of the informal transport sector owing to direct pass-through effects with varied sub-national welfare impact. Additionally, labor market reforms may increase wages of informal workers in the event of oil price shocks.