Employment Vulnerability in the Urban Labour Market in India-The Indian Journal of Labour Economics

This study deals with the issue of employment vulnerability in the urban labour market in India. Vulnerability in the labour market has been defined with the help of various dimensions of employment such as size of the employment at the firm,
place of work, type of work contract, and eligibility for social security benefits
and for leave benefits. The vulnerability indicator and set of indices have been
developed to capture the risks related to employment in the urban sector. The
study finds that workers are vulnerable not only in the urban informal sector
but also in the formal sector and the overall share of vulnerable workers has
marginally risen during the period under study. The association between the extent
of vulnerability and age, and the level of education and earnings distribution has
been found to be negative. Vulnerability is high for workers in the informal sector,
workers with part-time jobs, and with temporary jobs, and workers undertaking
casual work. The analysis of vulnerability undertaken here has been extended to
the local labour market in two cities in India—Delhi and Ranchi—during 2009-
10. The findings at the national level have been substantiated by similar results
pertaining to the incidence and intensity of vulnerability in these two distinctly
separate labour markets. The study finds that workers are more vulnerable in
Ranchi, particularly in the informal sector, than in Delhi. This can be attributed
to the prevalence of a more active labour market in Delhi. The study concludes
that the high intensity of vulnerability present in the urban labour market is partly
explained by the increasing ‘informalisation’ taking place in the labour market.
It also highlights the need for a social protection mechanism and the growth of
decent jobs.

This article is part of a special issue on informal employment in China and India with special editors, Jeemol Unni and Alakh N. Sharma.