A Comparative Analysis of Earnings Between Internal Return Migrants and Nonmigrants in India

ABSTRACT While migration is a largely discussed form of labor mobility, internal return migration of workers has not received much attention. Individuals return to their native or previous place either for reasons related to work, distress, or family. Not only are they returning to a place that is familiar to them in terms of language, culture, and society, but also, they may have acquired some skills before returning. Therefore, labor market outcomes for return migrants are likely to differ from those of nonmigrants, who are otherwise similar to each other in most aspects. Against this context, the paper compares the earnings of internal return migrants with nonmigrants in India using the Periodic Labor Force Survey 2020–21. To this end, the study performs ordinary least square estimation by sector (rural and urban), gender, age cohorts, and employment activity status (self‐employed, regular salaried, casual labor). As part of robustness analysis, it also uses the propensity score matching method. Both the exercises suggest that internal return migrants, on average, experience an earnings penalty in rural areas but a premium in urban areas. Also, a regular salaried internal return migrant experiences an earnings premium irrespective of the location (rural or urban). The earning pattern for men largely imitates the overall pattern. However, the earnings differential between female internal return migrants and nonmigrants is not significant as most of them migrate because of reasons other than work, like marriage. The findings of this study have significant implications, as what individuals do and how much they earn upon their return have direct consequences on the employment and income distribution of any region.