The Income Security Function of the Rural Sector: The Case of Calcutta, India

Abstract

This article offers a social-function-based analysis an alternative to the analysis of macrolevel policies commonly used in studying rural-urban relationships. This analysis is drawn from a microlevel study of rural contacts and retirement decisions of urban migrant housholds. The basic argument is that the rural sector performs an important income security function when it provides a retirement place for urban migrants maintains the elderly and the sick provides elementary education and is used as a vacation place by urban migrants. In the 1982 sample of 120 migrant households taken from 4 slums in Calcutta 100 households were relatively short distance migrants. Both the descriptive statistics of rural-urban migration to Calcutta and the probit analysis of the probability of return migration to the rural areas on retirement from the urban labor force indicate the importance of the income security function of the rural sector. Using the decision to retire to the rural area as a proxy for the act of having retired the author found that unlike the Latin American case most migrants still go back to their original home on leaving the urban labor force. Formal sector workers have a higher probability of going back while petty traders tend to stay in the city. The bulk of Calcuttas unskilled labor force is still of rural origin. The early part of the life cycle of these workers is spent in subsistence agriculture and their working life in the city is followed by retirement back into subsistence agriculture. The analysis leads one to conclude that regardless of the trends of the transfer of resources at the macrolevel the rural sector at the microlevel is serving a crucial income security function for the urban sector.