Most of rural agricultural workers landed in non-productive, informal urban jobs in 25 years: study
Study based on RBI’s KLEMS data says agricultural labourers moved to non-productive sectors such as restaurants, construction and transport
A recent study published in the Journal of Development Economics has revealed that most rural agricultural workers in India have found themselves in non-productive, informal urban jobs over the past 25 years. Co-authored by economists Rajeer Jat and Bharat Ramaswami, the research found that 63-75% of non-farm workers are in informal employment-dominated industries, with no significant improvement in their lives or the economy.
The study, based on Reserve Bank of India's KLEMS data from 1999 to 2024, suggests that policy reforms, including expanded education and healthcare facilities, could help those who migrated from agriculture find better opportunities in productive sectors around cities. The authors noted that the productivity gap between agriculture and non-farm sectors is small or negligible when accounting for differences in labour share, human capital, and hours worked.
However, the formal non-farm sector remains substantially more productive, with value-added per worker two to three times higher than agriculture. Real "structural dualism" in the Indian economy, the paper concluded, lies between the high-productivity formal sector and the low-productivity informal sector, not just between "farm" and "non-farm."
The study also highlighted that labour mobility between agriculture and the informal sector appears relatively unconstrained, with workers able to move freely between them.
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