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Transitions between informal and formal jobs in India: Patterns, correlates, and consequences

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  • Rajesh Raj Natarajan
  • Simone Schotte
  • Kunal Sen

Abstract

The Indian labour market is characterized by a high level of informality, with large numbers of workers in poorly paid 'lower-tier' informal jobs, and somewhat better paid 'upper-tier' informal jobs, which do not have the same benefits and security of tenure as formal jobs. We examine the likelihood of individuals moving up from informal jobs to formal jobs (and vice versa) and from lower-tier to upper-tier informal jobs using a longitudinal dataset for India. We find that self-employed workers exhibit relatively more mobility than wage workers.

Suggested Citation

  • Rajesh Raj Natarajan & Simone Schotte & Kunal Sen, 2020. "Transitions between informal and formal jobs in India: Patterns, correlates, and consequences," WIDER Working Paper Series wp-2020-101, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2020-101
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    Cited by:

    1. Sanjay Jain, 2021. "Informal employment or informal firms? Regulatory enforcement and the transformation of the informal sector," WIDER Working Paper Series wp-2021-123, World Institute for Development Economic Research (UNU-WIDER).
    2. Pallavi Choudhuri & Santanu Pramanik & Sonalde Desai, 2023. "Urban Exclusion: Rethinking Social Protection in the Wake of the Pandemic in India," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 17(1-2), pages 59-93, February.
    3. Bino Paul & Krishna Muniyoor, 2024. "What Determines the Dichotomy between Formal and Informal Employment: Evidence from Maharashtra, India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 67(2), pages 483-499, June.

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    Keywords

    Formal and informal; Informal; Formal; Lower tier; Work status; India;
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