Rural-Urban employment

Migration, Urban Under- and Earnings Differentials in Pakistan

By

G. B. S. M u j a h i d

C o n t e n t s: I. Introduction. - - II. Rural-Urban Migration. - - IlL The Structure of Urban Employment and Income. - - IV. Causes of Migration. - - V. Concluding Remarks.

I. I n t r o d u c t i o n

In the countries of the Third Wor ld the last two decades were character- ised by a rapid movement of populat ion and labour force f rom rural to urban areas 1, which due to a slow increase in employment resulted in bo th urban open unemployment and underemployment . In the absence of social security schemes the migrants f rom rural areas who fail to f ind jobs cannot afford to remain openly unemployed and are forced to eke out something to do, however low the earnings. The impact of the movemen t towards urban areas therefore reflected itself not so much in higher rates of u rban open unemployment as in the growing rmmbers of those eartxing low incomes

Remark: This paper reports findings of research undertaken in the "Sonder- forschungsbereich Nr. 86, Weltwirtschaft and internationale Wirtschaftsbeziehungen (Kid/Hamburg)," with financial support provided by the Deutsche Forschungsgemein- schaft. The author wishes to acknowledge comments by Dr. J. B. Donges, Dr. U. Hiemenz and Dr. H. Wander. For comments on an earlier draft, acknowledgements are due to an anonymous referee; Professor H. Turner, University of Cambridge; Mr. D. Jackson, Fellow of St. Catherine's College, Cambridge; and Mr. R. Amjad, Queen's College, Cambridge. The responsibility of remaining errors rests on the author alone.

1 UN, Department of Economic and Social Affairs, Growth of the World's Urban and Rural Population, z92o--2ooo , Population Studies, No. 44, UN Publ. E. 69. XlII. 3., New York, I969. - - Richard Jolly, "Rural-Urban Migration: Dimensions, Causes, Issues and Policies", in: Prospects for Employment Opportunities in the 2Vineteen Seventies, Papers and Impressions of the 7th Cambridge Conference on Development Problems, x 3.--24. 9- x 97 o, at Jesus College, Cambridge, Ed. by Ronald Robinson and Peter Johnston, London, 197 I, Pp. IX7 sqq.

38*

586 Berichte

from employment 1. This paper embodies an attempt at describing this phenomenon in the case of Pakistan and at provid ing some suggestive evidence on the causes of rural -urban migration.

II. Rural-Urban Migration

The urban populat ion of Pakistan now comprises quite a sizeable pro- port ion of the total population. F rom 19 per cent in 1951 the share of u rban populat ion increased to 24 per cent in 19613. In 197o it was estimated at about 28 per cent of the total popula t ion 3. Over the two decades u rban labour force increased at an annual compound rate of 3.7 per cent and by 197 ~ it formed one-fourth of the country 's total labour force t.

The rapid increase in the urban popula t ion and labour force has been the result of a high rate of natural growth plus a movement of popula t ion from rural to urban areas. Table i shows that dur ing the 195os 62 per cent of the increase in urban populat ion and 64 per cent of the increase in u rban labour force could be attr ibuted to rural -urban migration, while in the I96OS the respective figures amounted to 40 and 38 per cent. Since the change in defini t ion of urban areas between 1951 and 1961 could no t have by itself resulted in such a significant increase in u rban populat ion, we can safely conclude that the impact of migrat ion was smaller dur ing the 196os , though still large enough to raise the increments in u rban popula t ion and labour force by over 5 ~ per cent of what these would have been in the

See Gunnar Myrdal, Asian Drama, An Inquiry into the Poverty of Nations, A Twentieth Century Fund Study, London, i968 , Vol. 2, p. xxa4. - - Frithjof Kuhnen, Problems of Employment Promotion in Pakistan, Employment Research Papers, ILO, Geneva, 1971 , p. no. - - David Turnham with the Ass. of I. Jaeger, The Employment Problem in Less Developed Countries, A Review of Evidence, Development Centre Studies, Employment Series, Development Centre of the OECD, OECD Publ. 27,98i , Paris, i9yo , pp. x35 sq. - - ILO, Employment, Income and Equality: A Strategy for Increasing Productive Employment in Kenya, Geneva, i972 , pp. 51 sq. - - Doreen Warriner, "Problems of Rural-Urban Mi- gration, Some Suggestions for Investigation", ILO, International Labour Review, Vol. xol, Geneva, i97o , pp. 441 sqq.

* Government of Pakistan, Ministry of Home Affairs, Census of Population, z961 , Vol. 3, Karachi, Table 2. In 195I urban areas in Pakistan were defined to cover localities of 5,ooo or more inhabitants and all municipalities. From i96i the scope of the definition was widened to cover in addition, civil lines, cantonments and a few areas having urban characteristics but fewer than 5,000 inhabitants.

a Government of Pakistan, Planning Commission, Fourth Five-Year Plan, Islamabad, 197o, p. 469.

* That the proportion of total labour force in urban areas is less than the proportion of total population in urban areas is due to a lower participation ratio in urban areas. This can be explained partly by the relatively late entry into the labour force in urban areas. In 1969/7 ~ the participation ratios of males of age-groups xo--xi, i2--i4, I5-- i 9 and 20---24 respectively were in rural areas 23, 44, 75 and 94 per cent, and in urban areas y, 19, 48 and 82 per cent. Government of Pakistan, Central Statistical Office, Labour Force Survey, i~6g/7o , Karachi, p. 9.

G. B. S. M u j a h i d, Migration and Earnings Differentials in Pakistan 587

Tab le x - - Impact of Rural-Urban Migration on Growth of Urban Population and Labour Force in Pakistan, x 949/5 o - - i 969/7 ~

Percentage annual rate of increase in Percentage o f urban increase

due to rural-urban Period population labour force migration a

urban urban popu- labour all areas all areas areas areas lation force

I949/5o-- I959/6o �9 �9 �9 2.3 5.4 L6 4.x 62 64

1959 /6o- - 1969/7 o 2.9 4.5 2.3 3.4 4 ~ 38

a The increase attributed to rural-urban migration has been calculated as the actual increase in urban areas less the hypothetical increase assuming urban rates of increase were to have been the same as the rates for "all areas."

Source: Population figures for all areas from Government of Pakistan, Planning Com- mission: Third Five-Year Plan, x965; Fourth Five-Year Plan, x 9 7 o . - Urban population and labour force figures estimated by applying urban/total population ratios and labour force participation rates as shown by the Censuses of x95x and i96x , and Government of Pakistan, Central Statistical Office, Labour Force Survey, x969/7o.

absence o f in -migra t ion . T h a t the rates o f increase in u rban p o p u l a t i o n and l abour force were l o w e r in the i96os, in spite o f h i g h e r rates o f increase in to ta l p o p u l a t i o n and l abour force , shows tha t ru ra l -u rban m i g r a t i o n s lowed d o w n du r ing the ~96os 1.

IH. The Structure of Urban Employment and Income

T h e e m p l o y e d l abour force in the u rban areas can be d iv ided in to t w o parts - - tha t e m p l o y e d in the t rad i t iona l sec tor and tha t e m p l o y e d in the m o d e r n sector. T h e t rad i t iona l sec tor is character ised by act ivi t ies in wh ich lit t le skill and capital are requ i red , en t ry is re la t ive ly easy artd p r o d u c - t iv i ty and earn ings are low. T h e m o d e r n sec tor compr i ses o f act ivi t ies re- qu i r ing cons iderab le amoun t s o f skill and capital and in w h i c h en t ry is d i f f icul t and p r o d u c t i v i t y and earn ings are h i g h 2. Tab l e 2 shows tha t o u t o f

a See Shahid J. Burki, "Rapid Population Growth and Urbanization, The Case of Pakistan", Pakistan Economic and Social Review, Vol. xx, Lahore, x973, No. 3, P. z55.

s There is no single criterion on the basis of which the line between the modem and traditional sectors can be drawn. In fact there is no set terminology either for describing the two sectors. The distinction can also be made using the terms "organised" and "un- organised" sectors, or "formal" and "informal" sectors. See Kailas C. Doctor and Hans Gallis, "Modem Sector Employment in Asian Countries: Some Empirical Estimates",

588 Berichte

Table 2 - - EmiMo3ment in the Urban Modern Sector in Pakistan i964 and 197o

Industrial group 1964 197 ~

Mining and quarrying Manufacturing Construction Public utilities Commerce Transport and communications

�9 Services . . . . . . . . . . . . . . . .

Total

Urban labour force (millions)

Modem sector employment as percentage of urban labour force

2o,143 377,4 ol 73,757 37,227 22,501 67,792

356,893

955,714

3.77

25.4

24,I23 454,080

71,o79 58,566 39,603 87,978

494,973

1,23o,4o2

4.60

26.7

Source: For modem sector employment: Government of Pakistan, Ministry of Labour, Report of the Study Group on Unemployment, Islamabad, 1971. The Report counted all workers employed in enterprises having at least xo workers as being employed in the modem sector. - - For urban labour force: same as for Table 1. - - 1964 estimate is based on the assumption that urban labour force increased at an annual rate of 3.4 per cent during the 196os.

the total urban labour force in Pakistan only about one-four th has been employed in the modern sector. The remaining 75 per cent o f the urban labour force has been employed in the traditional sector - - in activities such as petty trading, domestic service and as casual labourers in various sectors 1. O f these a considerable p ropor t ion earn a very low income.

Very little information is howeve r available to assess the p ropor t ion o f workers having low incomes and the impact o f rural-urban migra t ion on urban income distribution. A survey conducted in Karachi in t96o suggests (Table t) that one third o f the workers could be categofised as " low-pa id , " i f earnings o f less than Rs 75 per mon th are chosen as an indicator2. I t can be seen f rom Table 3 that among certairt occupational classes - - sales work- ers, unskilled labourers and servants - - the p ropor t ion o f " l o w - p a i d "

ILO, International Labour Review, Vol. 9 o, 1964, pp. 544 sqq. - - The distinction here is made to show that work-sharing and underemployment are possible in the traditional sector but not in the modem sector.

1 Urban open unemployment, it may be pointed out, is very low. Censuses and surveys have shown it to range between a and 3 per cent of the urban labour force.

* In 1969 the West Pakistan Minimum Wages for Unskilled Workers Ordinance fixed the minimum wage for unskilled industrial workers in Karachi at Rs 14o per month. During the period 196o--1969 the cost of living index in Karachi rose by 40 per cent, so that by the standards of the Ordinance, the minimum living wage should have been Rs 1oo per month in 196o. We have defined those earning less than 75 per cent of the minimum wage as the "low-paid."

G. B. S. Muj ah id , Migration and Earnings Differentials in Pakistan

Table 3 - - Occupational Distribution by Earnings, Karachi, 196o

589

Occupation

Professionals and technicians . . . . Administrators and managers . . . Clerical workers Sales workers Drivers, postmen, and related . . . Skilled labourers Semi-skilled labourers Unskilled labourers

�9 Servants and related . . . . . . . .

All Workers

Percentage in occupation earning per month, rupees:

1--49 50--74 75 and more

14 13

3 33 19 I7 29 5I 46

26

7 8 85 97 56 79 78 67 38 37

67

I I

z

5 4

II

17

7

Source: Sultan S. Hashmi, Masihur Rahman Khan, and Karol J. Krotki, The People of Karachi, Data from a Survey, Pakistan Institute of Development Economics, Statistical Papers, No. 2, Karachi, I964.

workers is higher than average. Since the Household Survey (i966/67) showed that earners in these occupational groups were concentrated in the lower income households more than earners in other occupational groups (Table 4), there is further evidence that these are, and have cont inued to be, " low-pa id" occupations.

Therefore, changes in the p ropor t ion o f these occupations in the total labour force might provide a rough index of the changes in the p ropor t ion o f " tow-pa id" workers in the labour f o r c e r Table 5 shows that the total o f " low-pa id" occupations as a percentage o f the urban labour force increased during the period 1963/64--i969/7o~. In the group "craf tsmen, p roduc t ion

See Turn_ham, op. cir., p. 69. - - Also, "the underemployed were distinguished from the fully employed on the basis of certain job categories, since it can be demonstrated that a significant relationship exists between the category of occupation and the degree of employment." Erika Schwefel and Detlef Schwefel, "The Social Meaning of Unem- ployment, An Empirical Study of a Latin American Province", in: Employment Creation in Developing Societies, The Situation of Labor in Dependent Economies, Ed. by Karl Wohlmuth, Praeger Special Studies in International Economics and Development, New York, London, 1973, p. 254.

t Comparable figures are not available for other years. Moreover, it must be noted that the three categories - - sales workers, unskilled labourers and servants - - are not very well-defined, and hence the total of these is more relevant here. An unskilled worker for example, would be categorised as a "sales worker" if he were a peddlar; as an "unskilled labourer" if he were working on a building site; and as a "servant" if he were engaged as a night watchman at a private house. The varying types of work which unskilled workers manage to eke out for a subsistence are shown by this reply of a worker to an employment survey question in Latin America: "I help out wherever I happen to be needed - - as a peddlar, servant, or whatever else comes along." Schwefel and Schwefe], op. cir., p. 255.

590 B e r i c h t e

I ' ,-

' ,D ' ,D

0

I

"0

o ~

0

"~-0 " ~ 0

o~o~ o o

0 ~-O~N ~ - 0

0 ,,'-.',O 0 I " - 0 0 ,.-, ~I ~ '~- 0

0 ~- ~,11"--, ,D O~ 0 ~ ~ ~ ~" 0

0 I ' - ~ 0 ~ 0 0 0 ~ ~t~ ~-~0 0

~ 0 0

0 0 ~-~ 0 O0 O~ 0

0 0 ~1 w', 0 ~.., 0 oo 0

0 el ~- I'- ~ I'-

: t t I ' i ' ~ . ~ ~ 0 0 0 0 0

~o ~ ~o ~ <

d

O~

G. B. S. Muj ahid, Migration and Earnings Differentials in Pakistan 591

Table 5 - - Percentage of "Low-Paid" Occupations in the Urban Labour Force in Pakistan, x 963/64 and 1969/7 ~

Group x963/64 i969/7 ~

Sales workers Craftsmen, production process workers, and labourers

Workers in services, sports and

21.0

29.1 ( a . 5 ) a

�9 recreation activities . . . . . . . . 1 2 . 4

Total 62.5

I6. 5

50.0 (6.8) ~

5.9

72.4

a Workers in construction sector as percentage of urban labour force.

Source: Government of Pakistan, Central Statistical Office: Population and Labour Force Survey, 1963/64; Labour Force Survey 1969170.

process workers and labourers," which includes skilled, semi-skilled and unskilled workers, the percentage of unskilled workers also increased as indicated by the increase in the share of construction sector employment in total urban employment from 2.5 per cent in i963/64 to 6.8 per cent in x969/7o. While construction employment thus more than doubled, the sector's output (measured as the gross national product originating in the sector) increased by orgy 5 ~ per cent during the same period 1. Also, at the same time modern sector employment in construction as shown in Table 2 declined. This indicates that a large number of low-productivity and low- paid unskilled workers entered the construction sector which provides a sanctuary to unskilled day labourers - - the urban counterparts of landless agricultural labourers.

These findings suggest that the rapid in-migration from rural areas has generated an urban employment and income structure which does not offer better living conditions to prospective migrants. This hypothesis is supported by an analysis of urban and rural earnings distribution carried out on the basis of data collected under the Household Income and Expendi- ture Survey 1966/67 (Table 6). Although average earnings are 55 per cent higher than average rural earnings, the differentials are much less impressive in the lower deciles. For the lowest two deciles the average urban earnings of these deciles are only x6 per cent higher than the average earnings of the corresponding rural deciles. In view of the higher cost of living in urban areas the differentials shown in Table 6 do not measure the gap in the real earnings. No studies have been made to ascertain the extent by which the cost of living is higher in urban areas, but a difference of about 2o to z5 per

1 Government of Pakistan, Ministry of Finance, Pakistan Economic Survey x971--72 , Islamabad, Statistical Section, p. 6.

592 Beriehte

Table 6 - - Rural-Urban Earnings Differentials in Pakistan, i966/67

Number of decile a

I

2

3 4 5 6 7 8 9

I O

Average monthly earnings per earner (rupees)

urban [ i

rural

64.87 88.30

lO6.98 116.64 123.2o 135.65 158.O 9 181.o 3 212.98 45o.53

Urban earnings as percentage of rural earnings

116 116 136 141 136 135 148 161 16o 208

56.07 75 .88 I 78"83 I 82"52 ] 90.85

lOO.44 I

lO6.87 ! 112"77 I 133.32 216.37 I

i All deciles I 163"85 1~ 155

a From the bottom.

Source: Same as for Table 4. Owing to limitations of space, details of methodology used in deriving the estimates have been withheld, and those interested can obtain them from the author.

cent would be a plausible estimate 1. This means that the real earnings of the bo t tom 2o per cent of u rban earners are less than those of the bo t tom 20 per cent of rural earners. Also the rural-urban real differential is below 20 per cent up to the sixth decile. I t is only for the upper four deciles that the real earnings differential rises considerably above this figure.

The lower deciles of u rban earners are hence no t better-off than the corresponding deciles of the rural earners. Sirice the majority of migrants do come from amongst those who in rural areas are on the lowest rungs of the income ladder (the Survey of Work ing Condit ions of Rural Labour in West Pakistan (i963/64) found that landless labourers who are economi- cally the worst-off, were most inclined towards migrat ion (Table 7) 3 ) and

1 The only reference we have found to the extent of this difference dates back to 1953 when it was suggested that it could be 25 per cent. See Report by Sir Malcolm Darling, 1LO Expert, on Labour Conditions in Agriculture in Pakistan, Government of Pakistan, Ministry of Labour, Karachi, 1955, p. x 3.

* Surveys and studies have repeatedly shown that landless labourers are the poorest class in rural areas. See for example, Umar Khan Niazi, Agricultural Labour and ~ages in the Punjab, Inquiry Conducted by Umar Khan Niazi, under the Supervision of All Asghar Khan, Punjab Board of Economic Enquiry, Publication No. 1o6, Lahore, 1954. - - Frithjof Kuhnen, Agriculture and Beginning Induarialisation, IVea Pakistan, Opladen, 1 9 6 8 . - Zu- beida M. Ahmad and Marvin J. Sternberg, "Agrarian Reform and Employment with Special Reference to Asia", ILO, International Labour Review, Vol. 99, 1969. - - J. B. Eckert, Rural Labour in Punjab: A Survey Report, Government of Punjab, Survey Unit, Planning and Development Department, Lahore, 1971.

G. B. S. M u j a h i d, Migration and Earnings Differentials in Pakistan 593

since these migrants tend to join the lowest paid groups, their perspective urban income will rather diminish than increase compared to the rural earnings. Nevertheless people are cont inuously mov ing into u rban areas - - a phenomenon which calls for art explanation.

IV. Causes o f M i g r a t i o n

Rural-urban migrat ion has been attr ibuted to a number of factors of which the most commonly cited are the growing pressure of popula t ion on agricultural land, the spread of education in rural areas, and the difference in earnings between rural and urban areas x. Since a rise in the man/ land ratio is likely to have a direct effect of reducing average earnings in agriculture, thereby contr ibut ing to the rural-urban earnings differential, it is no t neces- sary to treat the two separately.

G iven the income perspectives shown in Table 6 actual earnings differ- entials as such cannot explain the drift to u rban areas. What seems to be a

Table 7 - - Inclination towards Out-Migration among Rural Workers in Pakistan, x963/64

Group

Owner farmers Owner-cure-tenants. . Tenants Landless labourers . .

Punjab rest of Pakistan

I I

3 z I I

9 54

Percentage of adult males willing to:

work outside take up work village in factory

Punjab

2

4 I

I 2

rest of Pakistan

I I i ! i

!

48

Source: Government of Pakistan, Ministry of Agriculture, Survey of Working Conditions of Rural Labour, x963/64, unpubl.

1 See Jolly, op. dr. - - Lloyd G. Reynolds, "Economic Development with Surplus Labour, Some Complications", Oxford Economic Papers, N.S., Vol. 2L x969, pp. 89 sqq. - - Urbanization in Asia and the Far East, Ed. by Philip M. Hauser, Proceedings of the Joint UN/UNESCO Seminar (in Cooperation with the ILO) on Urbanization in the ECAFE Region, Bangkok, 8--x8 August, ~956, UNESCO Research Centre on the Social Implications of Industrialization in South Asia, Calcutta, x957, Chapter V: "Economic Causes and Implications of Urbanization in the Recent Experience of Countries in the Far East", pp. x28 sqq. - - Christopher Howe, Employment and Economic Growth in Urban China, I9~9--r957, Cambridge, x97x , p. 67. - - Charles Raphael Frank, Jr., "The Problem of Urban Unemployment in Africa", in: Employment and Unemployment Problems of the Near Eaa and South East Ar Ed. by Ronalds G. Ridker, Harold Lubell, New Delhi, x97x , Vol. a, pp. 783 sqq. - - Paul Bairoch, Urban Unemployment in Developing Countries, The Nature of the Problem and Proposals for its Solulion, ILO, Geneva, i973, pp. 25 sq.

594 Berichte

more likely cause is the difference between the earnings of the prospective migrants in rural areas and the earnings in the employment they expect to get in the urban areas 1. Since, as we can see from Table 7, the likelihood of migrat ion is greatest for agricultural wage labourers who hope to get jobs in factories, the difference between the earnings of wage labourers in agri- culture and industry may afford an explanation of rural -urban migrat ion.

In measuring this difference we are once again handicapped by a lack of data. While data on industrial wages is available there is only very little and scattered information on agricultural earnings ~. A study made in I95 i showed that an agricultural labourer managed to earn on an average abou t Rs 3oo annually s. Kuhnen ' s survey carried out in i962 revealed that the average annual earnings of wage labourers were Rs 35o. The Survey of Rural Labour in the Punjab ( i97 0 put the annual income of temporary labourers at Rs 4xo and of permanent labourers at Rs 47 o4. Since a very small minority of agricultural labourers are hired as permanerlt labourers, Rs 4IO is a more realistic estimate of the earnings of the group as a whole. While this information is fragmentary it does provide an indicat ion of the approximate level of earnings of agricultural labourers and suggests that dur ing the two decades these increased at no t more than an average rate of 2 per cent per annum.

Data on wages in industry is available from the Ministry of Labour and the Census of Manufacturing Industries 6. Table 8 shows the increase

i For the theoretical framework developed to explain that the movement depends not on the actual rural-urban earnings differential but on the expected difference, see Michael P. Todaro, "An Analysis of Industrialization, Employment and Unemployment in Less Developed Countries", Yale Economic Essays, Vol. 8, New Haven, Conn., i968, pp. 329 sqq. - - Idem, "A Model of Labor Migration and Urban Unemployment in Less Developed Countries", The American Economic Review, Vol. 59, Menasha, Wisc., x969, pp. I38 sqq.

2 We must emphasise the reason for using the term "earnings" instead of "wages" in the case of agricultural workers. Industrial work is generally regular and hence changes in earnings of industrial workers are directly related to changes in the wage rate. The em- ployment of agricultural workers is however irregular and their earnings therefore depend not only on the wage rate but also on the number of days for which they can find employ- ment. The rate of increase in agricultural wages may therefore provide no indication of what has been happening to workers' earnings.

s Niazi, op. cir.

4 Permanent labourers are those hired for a period of six months or a year, while temporary labourers are those hired on a daily wage basis.

8 The Ministry of Labour provides data on the average payments made under the Payment of Wages Act x936. This covers all workers receiving less than Rs 2,4oo per annum, employed in enterprises employing 2o or more workers and using power. The Census of Manufacturing Industries provides data on the average payments made to production and non-production workers. Until I959/6o its coverage (with respect to size of establishment covered) was similar to that of the Ministry of Labour data, but after that it was widened to cover enterprises which employed xo or more workers.

G. B. S. Muj a h i d , Migration and Earnings Differentials in Pakistan

Table 8 - Trend of Industrial Wages in Pakistan, i95o--1968

595

Census of Manufacturing Industries data Ministry of Labour data a

Year annual ] average annual average earnings I annual earnings annual

per worker I rate of increase per worker rate of increase

rupees per cent rupees per cent

I95o

1954

1959/6o

1964/65

1967168

n . a .

980

l , Z 3 0

1,43o

1,65o

n . a .

3.9

3.I

4.7

7 o o

840

I)2IO

1,445

1,64 o

4.7

6.3

3.5

4.3

n.a. = not available. - - a Data for end years, e.g., 196o for i959/6o.

Source: Government o f Pakistan, Central Statistical Office, Karachi: Census of Manu- facturing Industries, various issues; 25 Years of Pakistan in Statistics, 1972.

in average annual wages per worker for a few selected years. According to the Census data, wages increased at the average annual rate of 3.9 per cent during the second half of the I95os. During the next five years the rate was 3. x per cent a n n u m - - the decline may be explained partly by the widening of the coverage to include industries of a smaller scale. The rate was 4.7 per cent during 1964/65--I967/68. For each period the Ministry of Labour data shows a rate of increase which is similar to that shown by the Census data, except in the case of the period i954--i959/6o. The considerably lower rate for the latter period revealed by Census data is due to the extension in coverage - - the later Census covering a larger number of smaller enter- prises. However, during each given period, the annual rate of increase in industrial wages as derived from both sources of data is well above z per cent, which we found to have been the maximum plausible rate of increase irt the earnings of agricultural workers.

The higher rate of increase in industrial wages resulted in the widening of the gap between agricultural earnings and industrial wages. While average industrial wages were about two-and-a-half times as high as the average agricultural earnings ir~ the early i95os these were three-artd-a-half times as high in the early i96os and four-times as high in the late i96os. The introduction of the West Pakistan Minimum Wages for Unskilled Workers Ordinance itx i969 caused an abrupt increase in industrial wages, and there-

596 Berichte

fore a further widening of the gap 1. The minimum wage of Rs 1,38o per annum fixed for unskilled labour under the Minimum Wages Ordinance was itself almost three-and-a-half times as high as the average annual earnings of landless agricultural labourers estimated at about Rs 41o 3.

But in spite of this widening gap between agricultural earnings and industrial wages there was a slowing down of the rate of rural-urban migra- tion during the 196os relative to the i95os. This observation, however, supports the above hypothesis that the decision to migrate is heavily depen- dent on the difference between current and expected earnings. This includes an appraisal of the chances to get a better paid job. Thus, the lowering of the rate of migration may be explained by the reduced expectancy of prospective migrants of getting a job of their liking. While there is no statistical evidence which can be used to determine when during the i96os the rate of migration declined, it is likely that this may have happened during the last three years of the decade, which were marked by political turmoil, military activity and industrial unrest. The lower expectancy of getting a factory job under such conditions therefore probably offset partly the incentive to migrate resulting from the wider agricultural earnings- industrial wage differential. I t is not merely the earnings-wages gap but also the probability of success in getting the opportunity to earn the higher income that explains the rural-urban migration rate.

A further important causative factor of migration was commonly assumed to be the spread of education in rural areas. Education stimulates the aspi- rations of the young people and their job expectations rise above the type of employment available in the rural areas. Those who manage to receive some education do not generally like to remain in the rural areas, particularly in agricultural employment*.

The fragmentary evidence which is available on rural education and out-migration in Pakistan indicates no straightforward relation. On the one hand, a survey conducted by Kuhnen in three villages of the Punjab in 1962 showed that on the average the level of education attained by out- migrants was higher; Table 9 shows that the average duration of schooling received was the longest for out-migrants and the shortest for agricultural labourers. On the other hand, evidence is provided in Table 7 that the land- less labourers have shown the greatest inclination towards migration.

t According to the data collected by the Ministry of Labour on wages paid under the Payment of Wages Act i936 , average annual earnings per worker were Rs x,64 o in 1968 and Rs x,885 in 1969, that is higher by 15 per cent. Government of Pakistan, Central Statistical Office, 25 Years of Pakistan in Statistics, op. tit., p. 37.

* For certain areas it was fixed even higher. The minimum annual wage fixed under the Ordinance was Rs x,68o for the Karacki region; Rs 1,5oo for industrial areas and Rs t,38o for the rest of West Pakistan. Government of Pakistan, Ministry of Finance, Pakistan Economic Survey 197o/71 , p. 221.

t Myrdal, op. dr., pp. iI27 sq. - - Mark Blaug, Richard Layard and Maureen Wood- hall, The Causes of Graduate Unemployment in India, London, 1969. - - Abroad and Sternberg, op. dr., p. 173.

G. B. S. M u j a h i d , Mig ra t i on a n d E a r n i n g s Dif ferent ia ls in P a k i s t a n 597

Table 9 - - Education and_Rural-Urban Migration in Three Pakistan Villages, 1962

Group

Agricultural workers With land Landless labourers

Non-agricultural workers Within village Outside village

Average duration of school attendance (in years)

Kamalpur Gokuwal

2.6 3.3 - - 0. 7

3.2 1.7 8.I 4.3

BaUanwala

1.9 0 .2

2 . I r

I 3.4

Source: Kuhnen, Agriculture and Beginning Industrialisation, op. cir.

This apparent contradiction can be solved, however. The Survey of Rural Labour in the Punjab (1971) which collected information on the difference between the average educational levels of families with and without out- migrants reveals (Table io) that some families without out-migrants had a higher educational level than some families with out-migrants. But within the same group, families with out-migrants showed a higher educational attainment. For example, those landless labourers who attain a higher level of education (even though this may be lower than the level of education attained by other groups as is in fact the case in Table 1o) are more likely to migrate than those landless labourers who have attained a lower level of education.

One may conclude, therefore, that a higher level of education acts as a contributory cause of migration. Within a given socio-economic class, the more educated have a higher inclination to migrate to towns. But which socio-economic classes show a greater tendency to migrate seems to be determined by the existence of an earnings differential. Nevertheless the

Table io - - Education Levels 2ieported by Different Occupational Groups with and without Out-Migrants a in Pakistan, x 971

Families with Families without Occupational group out-migrants out-migrants

I I Large farmers

Small farmers Tenants Labourers Artisans Shopkeepers

1o.9 8 .o

5.3 1.7 4.8 6.6

7.5 4.6 3.9 0.8 3.2 6. 3

Source: Eckert, op. cir., Table 16, p. VIII--8.

a Figures are the average of the highest educational level (in years) reported for adult male living in each household. ar ty

598 Berichte G. B. S. Muj ahid, Migration, and Earnings Differentials in Pakistan

Table 11 - - Expansion of Education in Rural Areas of Pakistan, i96i and 1968/69

Age in years

Percentage of population having attended educational institutions

males females

1961 1968/69 1961 1968/69

5-- 9 17.8 29.2 I~ 34 .1 59.7 IS--I 9 29.8 41.9 20--24 23.2 36.4

6.4 7.4 7.9 12.i 4.0 8.7 2.7 2.9

Source: 1961 : Government of Pakistan, Ministry of Home Affairs, Census of Population, xg0"I. - - I968/69: Government of Pakistan, Central Statistical Office, Labour Force Survey, x96g/e'9.

spread of education as indicated by the rising proportion of the rural popu- latiort who have attended educational institutions (Table 11) 1 might enforce the tendency to migrate among low paid agricultural labourers.

V. Concluding Remarks

Rural-urban migration contributed considerably to the growth in the urban labour force in Pakistan during the i95os and the i96os. As a result of an increase in modern sector employment which was barely sufficient to absorb a little more than 3o per cent of the increase in the urban labour force during the i96os (for which only this estimate can be made) a considerable proportion of the increase in the urban labour force was forced into eking out work which provided a low income.

The main cause of rural-urban migration can be traced to the differential between agricultural earnings and industrial wages, coupled with the probability which prospective migrants, who belong mostly to families of landless labourers, attach to their chances of getting a job in industry. The attainment of education acts as only a contributory, but positive, factor in the decision to migrate to urban areas.

The evidence from the past two decades therefore suggests that it would be futile to tackle the urban unemployment problem through an isolated strategy of providing productive jobs in urban areas. Such a strategy may in fact be self-defeating in that it would act as an incentive to further rural-urban migration. Attention therefore rteeds to be directed also at providing opportunities of earmng better incomes irx the rural areas so as to curtail the tendency of the gap between agricultural earnings and indus- trial wages to widen.

Figures on school enrollment in rural areas are not available.