The Geography of Segmentation of Informal Labor Markets: The Case of Motor Vehicle Repair in Calcutta

* Preliminary research findings were presented in a talk entitled “Labor and Entrepreneurship in Small Garages in Calcutta,” given at the Center for Urban Economic Studies, Department of Economics, Calcutta University, 3 June 1998. We thank those present for their insightful comments. We thank Debashish Bhattacherjee, Sumit Guha, and the three anonymous referees for helpful comments on an earlier draft of this paper. We are grateful to the Center for Management Development Studies, Indian Institute of Management Calcutta for the research grant that made this study possible. Maps in the paper were prepared by Brian Feeney of the University of Georgia’s Campus Graphics and Photography.

Abstract

Although the informal sector has been the subject of enormous academic interest since the mid-1970s, one topic that has received relatively little scholarly attention is the spatial dynamics of informal sector activities and their labor markets. Our study examines the processes giving rise to the spatial segmentation of informal labor markets using a case study of motor vehicle repair workers in two areas of Calcutta. Our findings indicate that location within the metropolitan area has a major influence on the demand and supply of labor as well as remuneration. Labor market contrasts between the older, congested parts of the city and the urban periphery in turn influence the scale and form of the organization of work. Second, spatial segmentation is reinforced through place-based interactions between employers and employees. Third, a young labor force socialized in rural and semirural areas forms a low-earning segment of the metropolitan labor market.

Keywords:

• labor market segmentation
• informal sector

Notes

* Preliminary research findings were presented in a talk entitled “Labor and Entrepreneurship in Small Garages in Calcutta,” given at the Center for Urban Economic Studies, Department of Economics, Calcutta University, 3 June 1998. We thank those present for their insightful comments. We thank Debashish Bhattacherjee, Sumit Guha, and the three anonymous referees for helpful comments on an earlier draft of this paper. We are grateful to the Center for Management Development Studies, Indian Institute of Management Calcutta for the research grant that made this study possible. Maps in the paper were prepared by Brian Feeney of the University of Georgia’s Campus Graphics and Photography.