Most of rural agricultural workers landed in non-productive, informal urban jobs in 25 years: study
A study published in the Journal of Development Economics reveals that most rural Indian workers migrating to cities end up in low-productivity informal jobs rather than the formal sector. The authors suggest that policy reforms focusing on education and healthcare are necessary to bridge the productivity gap.
Why it matters
It highlights a critical structural issue in the Indian economy where labor migration fails to translate into significant economic advancement for workers.
A study on productivity gap in farm and non-farm sectors, published in the Journal of Development Economics and authored jointly by economists Rajeer Jat and Bharat Ramaswami, has found that that the labourers from agriculture sector, who shifted to cities, were pushed towards non-productive sectors such as transport and restaurants making no substantial changes either in the economy or in their lives. It said that between 63% and 75% of non-farm workers are in informal employment-dominated industries that are not more productive than agriculture.
The authors suggest policy reforms, including expansion of education and healthcare facilities, to help those who migrated from the agricultural and rural economic sectors to find vocations in productive sectors around cities. The study is based on the data sourced from the Reserve Bank of India’s KLEMS (Capital, Labour, Energy, Materials and Services) data since 1999 till 2024.
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