Rural Non-farm Employment in Eastern India: Implications for Economic Well-being

Abstract

To be inclusive, economic development in India must focus on eastern India, which has a high population growth rate, population pressure, high incidence of poverty, small landholding size in agriculture, and underdeveloped rural infrastructure. Employment diversification towards the non-farm sector in eastern India from 1993–1994 to 2011–2012 shows considerable variation by income group and farm-size. The effects of diversification—whether driven by pursuit of higher income or distress—are stratified. Estimates based on instrumental variable regressions suggest that all types of non-farm employment improve the economic well-being of households.