Trends, composition and determinants of rural non-farm employment in Assam and its implication for rural income distribution

Abstract

The chapter has addressed the question of what drives the expansion of rural non-farm employment in Assam and the distributional consequences of expansion of rural non-farm employment in Assam. The study in this chapter is based on both primary and secondary data such as NSS and census. The study of determinants of RNF employment at the individual level signifies that both push and pull factors are in operation when it comes to participating in the non-farm sector. As the level of education of rural workers improves, they are more likely to join the non-farm sector for higher returns. However, a U-shaped relationship between land cultivated and non-farm participation indicates that rural workers with little or no cultivable land are being pushed out of agriculture, and those with higher cultivable land may be lured to the non-farm sector by the possibility of higher potential returns of their investment of surplus generated in the agriculture sector. As regards the distributional aspect of RNF employment, the evidence from our primary survey in two villages indicates unequal distribution of rural non-farm income, i.e., non-farm income is concentrated among the households with a large size of land compared to the households with smaller land size. The result of Gini decomposition suggests that income from non-farm sector increases the overall income inequality, while farm income reduces inequality.