Patterns of Labour Market Insecurity in Rural India: A Multidimensional and Multivariate Analysis

Labour market insecurity, recognised as pervasive in rural India, is multi-faceted. This study attempts to fill a gap in the research on key dimensions of labour market insecurity by using the National Sample Survey data for the year 2004-2005 for rural India to construct a composite index applying multiple correspondence analysis. In constructing the index, information on key dimensions of labour market insecurity are used, including labour force status according to longer and shorter reference period measures, labour time utilization, and behavioural responses to labour market risks. The index is then used to address the question of how the labour market insecure differ in their socioeconomic, household, and individual characteristics from the labour market secure using a selectivity-corrected ordered probit model. Notwithstanding the limitations of the database, the main results that stand out are: insecurity is more pervasive among women than men; insecurity is prevalent among some self-employed but less severe than among casual labourers; and women who are illiterate, agricultural labourers, and belong to the scheduled caste/tribes are at a heightened risk of labour market insecurity. Factoring in selectivity bias shows that for men, self-selection into higher levels of insecurity is at the cost of human capital acquisition while self-selection of women into different levels of insecurity is affected by their socio-cultural and economic status.