Migration in India under structural transformation

Purpose This study aims to answer if inter-state migrants in India play a more active role than their intra-state counterparts in labor force participation and entrepreneurship. Design/methodology/approach A recursive bivariate probit model is used with an instrumental variable (IV) of the total of inter-state migrants in a city over their historical numbers to tackle the endogeneity issue of the migration decision of the migrants. Findings Inter-state migrants did a better job than their intra-state counterparts in labor force participation and female inter-state migrants did a better job than their counterparts in wage employment and being day laborers. Research limitations/implications The data are from IPUMS and there is no updated nationwide data regrading migration and employment for recent years. Practical implications A randomized controlled trail can be carried out near the borders of two states where there are both significant amounts of inter-state and intra-state migrants. Social implications The government and international organizations shall focus on cultivating the skills of the female migrants as well as encouraging the entrepreneurship of both types of migrants. Originality/value The study focus is on the comparison between intra- and inter-state migrants based on nationwide survey data and the usage of recursive bivariate model and an effective Instrumental Variable.