Services-Led Structural Transformation and Translocal Householding

Abstract

<p> This article argues that two distinctive features of India’s development pathway—its agriculture-to-services leap and its high levels of temporary, circular migration—are interlinked and mutually reinforcing. First, we mobilize multiple literatures to show that economic growth led by export services produces a polarized labor market in India’s prosperous cities, drawing rural–urban migrants but failing to provide them permanent footholds. These dynamics reinforce and expand the widespread practice of translocal householding, in which individuals and families straddle multiple locations and labor markets. We then employ an empirical strategy involving a spatial instrumental variable to show that translocal householding also facilitates an agriculture-to-services transition in migrant origins. These findings show that, as households arbitrage their labor across space, their translocality establishes a livelihood system that supports the spatial diffusion of the structural transformation process. However, because economies in migrant-sending regions are organized around local consumption, they are less poised for prosperity than those of India’s metropolitan areas, possibly leading to durable patterns of uneven development. The article calls for further inquiry into the role of translocality in shaping the economic geographies of the Global South, not only in India but in other countries witnessing similar forms of internal migration and structural transformation. <br></p>