9_Mobility and Welfare From Jobs in Indian Cities The Case of Bengaluru

Mobility and Welfare From Jobs in Indian Cities: The Case of Bengaluru Kala Seetharam Sridhar Institute for Social and Economic Change Bengaluru, INDIA 4th Annual Sustainable Smart Cities India Summit Bengaluru 6-7 September 2018 1

Background and Objectives• Background• How accessible are jobs in India’s silicon valley, Bengaluru?• Are the commute time, distance and costs different across occupations?• Are jobs in Bengaluru welfare enhancing? 2

Theory• What is effective labor market? • Distinction between nominal and effective size of labor market• Welfare defined by net benefits from jobs • Wages and reservation wages • Hypothesis regarding reservation wages 3

Methodology• Large primary surveys of households• 27 representative wards of the city, with 100 households each (Map) • Delphi method• Map of the boundaries of the wards• Linear systematic sampling • N (Frame)/n (Intended sample size)=K (integer) rule for sampling of households• Primary surveys done during August 2016-March 2017 4

Map of Sampled Wards 5

Socio-Economic Profile 6

Socio-Economic Characteristics N Minimum Maximum Mean Std. Dev 2700 1 8 3.67 1.24 2700 0.90Household Size (Total persons: 9,922) 2700 0 4 0.81 24254.59 No of Children (Total children (<=18 752 130 0 920000 20470.52 11468.11 years) covered: 2,197) 11736.11 0 125000 15667.42 9390.52 First Person Income (in Rs./month) 577.35 0 120000 13507.69Second Person Income (in Rs./month) 7 Third Person Income (in Rs./month)Fourth Person Income(in Rs./month) 22 3000 50000 12909.09Fifth Person Income (in Rs./month) 3 8000 9000 8333.33Sixth Person Income (in Rs./month) 1 9000 9000 9000.00Source: Primary surveys of 2,700 households in Bengaluru and author analyses

Income, Expenditure, and Reservation Wages Variable Std. Economic Deviation survey ofKarnataka’s N Minimum Maximum Mean Karnataka:urban per capita 2015-16 monthlyincome: Labor income-first per capita income:Rs.19,018 for income earner (in Rs2015 (based on 12,149CSO data for Rs per month) UrbanKarnataka, Karnataka:divided by its 220 3,000 400,000 28,500.00 40055.31 Regular monthlyurban population) wage income: Rs. Lowest monthly 14,610 wage (in Rs per month) 220 1000 200,000 22,300.00 20652.91 Monthly Household Expenditure (in Rs per month) 220 0 50,000 12,100.00 7869.23Source: Primary surveys of 2,700 households in Bengaluru and author analyses 8

Residence and Living ConditionsVariable N Minimum Maximum Mean Std. DeviationTotal floor area of 2700 60 (5.6 sq m, 1.5 3000 (278.71 sq m, 764.55 (71 sqhouse (in sq ft) sq m per capita) 75.94 sq m per m, 19.35 sq m capita) per capita)* 402.93Duration of stay in 2700 0 62 13.56current house (in years) 12.34Total No of Toilets 2700 0 4 1.11No of Mobiles 2683 1 0.40 8 2.09 0.77No of Laptops/ 4 1.11Desktop/ Tablet 350 1 0.36* Per capita consumption of floor area, assuming average HH size of 3.67, is 19.35 sq mSource: Primary surveys of 2,700 households in Bengaluru and author analyses 9

Floor Area Consumption Across Cities Around the WorldCity Floor area per person (in square meters)Copenhagen 43.9Stockholm 41.0Berlin 37.9Helsinki 34.2Warsaw 24.5Shanghai 13.1Mumbai 2.9 Sources: Bertaud (2011), City of Helsinki Urban Facts (2008) 10

Commute Time, Distance, Costs and Functional Labor Market 11

Commuting Distance, Time and Costs N Minimum Maximum Mean Std. DeviationTime taken to Travel by the most 220 0 140 30.2 24.77direct route (one way in minutes) 220 0 70 7.31 8.53Distance Travelled (One Way inkms)Cost per Day Round Trip (in Rs) 220 0 500 36.16 45.02Source: Primary surveys of 2,700 households in Bengaluru and author analyses 12

Commute Time: What Do Other Studies Show?City Work Avg time Avg distance KM Location taken travelled (km) TravelledNCR (mins) per min DLF Cyber 93.91 38.97Chennai City 0.41Hyderabad Chengalpattu 63.05 34.70Mumbai Hitech City 51.98 20.10 0.55Pune Malad 50.77 19.06 0.39Bengaluru Kharadi 48.98 19.87 0.38 Whitefield 46.8 16.8 0.41 0.36Sources: MoveInSync report 2016 and Nayka & Sridhar, Urbanisation, forthcoming 13

Commuting Mode: Comparison with Census 2011 Commuting Mode Our % Census 2011 % Walk Cycle 20.63 23.51 Bus 0.63 4.42 17.48 23.13Autorickshaw/Tempo 3.67 2.79 Two wheeler 42.78 18.53 Four wheeler 7.48 8.53 0.11 0.43 Any Others (Metro)Source: Primary surveys of 2,700 households in Bengaluru, Census of India 2011 and author analyses 14

Commuting Distance, Time and Costs by Occupation Weighted Average one Weighted Average Weighted average distance (one way, in KMS) way travel time (in Commute DailyOccupation minutes) Costs/one way (in Rs)Teaching and or Research 33.35 42.40 7.27Doctor 25.84 57.26 5 38.95 51.98 8.75Engineer 19.33 24.03 3.57 51.77 59.14 12.78Own Business 27.54 31.45 5.48ICT 51.77 59.14 12.78Average 19.33 24.03 3.57MaxMinSource: Primary surveys of 2,700 households in Bengaluru and author analyses 15

What is Bengaluru’s Effective Labor Market?Name of the Ward Central or Workers (2011 Wtd avg (in Jobs w/in 1 min peripheral DCHB) minutes)Kempegowda Ward P 14,794 26 563Kodigehalli 646Bagalkunte P 20,690 32 877Yashwanthpura 973Chokkasandra P 28,278 32 1179Malleshwaram 485Devarajeevanahalli P 16,911 17 482K.R.Puram 618C.V Raman Nagar P 33,082 28 875Heggenahalli 1253Hagaduru C 13,572 28 755H.A.L Airport 658Shivaji Nagar C 16,403 34 611Subhash Nagar 654Chikpete P 14,711 24 526 C 27,027 31 P 34,123 27 P 22,359 30 P 16,457 25 C 12,723 21 C 16,569 25 C 12,158 23Sampangirama Nagar C 11,017 22 498Kempapura Agrahara C 18,454 807Padarayanapura C 13,034 23 856Bellandur P 42,330 15 1387Koramangala C 18,350 31 598Jayanagar C 15,662 31 668Kengeri P 16,631 23 590Rajarajeshwari Nagar P 24,660 28 732H.S.R. Layout P 30,718 34 1090Kumaraswamy Layout C 19,931 28 548Uttarahalli P 25,161 36 710Konanakunte P 25,446 35 806 Average 20,787 32 757 Max 42,330 27 1387 Min 11,017 36 482 15Source: Primary surveys of 2,700 households in Bengaluru and author analyses 16

Accessibility of Jobs, Selected Cities Across the World, Comparison with BangaloreMinutes’ 10 20 30 40 50 60Commute % of Jobs AccessibleNew York 2 9 21 38 61 89Los Angeles 5 22 51 92 100 100Chicago 3 13 31 58 93 100Washington 5 20 49 90 100 100Atlanta 3 13 32 59 95 100Bangalore 40 81 100 (25 mins)Sources: Bertaud (2014), Primary surveys of 2,700 households in Bengaluru and author analyses 17

Welfare and Net Benefits from Jobs 18

Reservation Wages by Education70000600005000040000300002000010000 0Source: Primary surveys of 2,700 households in Bengaluru and author analyses 19

Reservation Wages by Occupation6000050000400003000020000100000 Doctor Engineer Own Business ICT Others Teaching and or Research Source: Primary surveys of 2,700 households in Bengaluru and author analyses 20

Summary Statistics for Wage Differential from Jobs Ratio of actual to stated reservation wageN 220Minimum 0.00Maximum 10Mean 1.41Source: Primary surveys of 2,700 households in Bengaluru and author analyses 21

Estimation of Reservation WageCharacteristic Estimate T statisticConstant -6121.55 -0.77Sex (1 = Male, 0 = Female) -498.43 -0.20Age (in completed years) 330.51** 2.87Marital Status (1–Never Married, 2–Married, 3–Widowed, 4– -1943.12 -0.83Divorced, 5–Separated) 5.55Education 2462.94*** -0.42Main Activity (1–Employee, 2–At Home, 3–Student, 4–Retired, 5- -266.64 7.87Self Employed, 6-Labourer, 7-Others (specify)) 1.03 -0.20Current wage (Monthly wage in Rs) 0.22*** -0.20Duration of current employment (in years) 151.99HH size (Number of persons) -165.85Slum or non Slum (1-General Household, 2-Slum) -779.49F value 19.65R-squared 0.46Number of observations 219 Source: Primary surveys of 2,700 households in Bengaluru and author analyses 22

Summary Statistics for Wage Differential from Jobs, Using the Predicted Reservation WageN Ratio of actual wage to predicted reservationMinimum wage 219 -5.33Maximum 7.55Mean 1.17Source: Primary surveys of 2,700 households in Bengaluru and author analyses 23

Summary of Findings and Implications• The picture we have of the city is one with modest incomes, not that of silicon valley with the IT sector leading to high incomes• All of Bengaluru’s jobs are accessible within a 30-minute commute, in contrast to North American cities for which the data are available• The commuting distance, time and costs are the highest for ICT workers, and lowest for the self-employed• The jobs of Bengalureans are not welfare-enhancing • More of better quality and more skilled jobs needed• Given a majority of our sample is single income earner households, the commute time is short, making for a large effective labor market • Possible that due to congestion, commuters are locating close to their place of work, walking or using the metro/public transport such as buses • Need more information on journey to work 24

Data Caveats• Data on jobs are from the Census 2011 • If jobs are created or fired, our job accessibility is unable to capture• Assumption that primary surveys are representative • Comparison with Census data indicates confidence• Reservation wages are real • Comparison with actual wages and expenditure indicates similar neighborhood 25

Thank you for the attention 26