On-the-Job Search in a Developing Country: An Analysis Based on Indian Data on Migrants

Abstract

Job search by those who are employed has received increasing attention in recent years in both the theoretical and the empirical literature on labor markets in developed countries.' Much of the interest stems from the observation that job changes often take place without an intervening period of unemployment and that there is a close relationship between searching for a job and quitting the current job. Also, on-the-job search affects the rate of unemployment during the period between jobs. A major preoccupation of the empirical research has been to estimate the returns to on-the-job search and to test the determinants of job search. The bulk of this work uses data for the United States and the United Kingdom.2 Job search theory has not been empirically tested in the context of a developing country. On-the-job search, particularly in the so-called informal sector of the urban labor market, is an important feature of probabilistic models of migration in developing countries in the vein of Michael P. Todaro and of John R. Harris and Todaro.3 Such models hypothesize that individuals migrate to urban centers with the aim of obtaining employment in the formal sector and that informal-sector employment is a transitional phase during which migrants are searching for formal-sector jobs. Recent work by Gary S. Fields has formalized the theoretical aspects of this job search process within the framework of a multisector model.4 Thus, it would be of interest to find out if there are significant differences between developed and developing countries with respect to the determinants of on-the-job search.