Non-farm Wage Employment Research Articles

The effects of the Indonesian conditional cash transfer program on transition out of agriculture

This study evaluates the effect of a conditional cash transfer (CCT) on the structural transformation process in a developing economy. It uses randomized control trial (RCT) data from Indonesia’s Conditional Cash Transfer program, the Family Hope Program (PKH), to examine whether the PKH program has a significant impact on whether or not agricultural households have moved to other sectors after six years of implementation of the program. The estimates reveal modest impacts of the PKH program on diversification of livelihoods outside agriculture. The treatment group has a 28 percent higher participation in nonfarm wage employment and a 23 percent higher rate of employment in a nonfarm enterprise (NFE) compared to the control group. The heterogeneous impact analysis reveals that distance from a market is a major factor in determining the type of non-agricultural employment. Individuals in households with only a small amount of land who reside near a market are more likely to be casual workers, while individuals in households with only a small amount of land who reside far from a market are more likely to have an NFE. Interestingly, participation in a CCT program has larger effects on households residing in nonindustrial areas than in industrial areas, in terms of both nonfarm wage employment and employment in a nonfarm enterprise.

Is There an Informal Employment Penalty in Food Security? Evidence from Rural Vietnam.

In this paper, we investigate the association between informal non-farm wage employment and household food security in rural Vietnam. The data for our analyses come from a nationally representative panel dataset of 1390 rural households from Vietnam Household Living Standards Survey. We conduct multivariate regression analysis using robust quantitative tools to show that informal employment is associated with a reduction in the consumption of nutritious foods. Our analysis also shows that informal employment reduces consumption of vegetables and fruits, using both the calorie- and expenditure-based shares of food groups.

Immediate impacts of COVID-19 on female and male farmers in central Myanmar: Phone-based household survey evidence.

This article provides evidence of the immediate impacts of the first months of the COVID‐19 crisis on farming communities in central Myanmar using baseline data from January 2020 and follow‐up phone survey data from June 2020 with 1,072 women and men. Heterogeneous effects among households are observed. Fifty‐one percent of the sample households experienced income loss from various livelihood activities, and landless households were more severely affected by the crisis, mainly because of lost farm and nonfarm employment and negative impacts on rural enterprises. Women and men in these landless households were equally engaged and affected by lower wages or more difficulties in finding farm work; fewer women were engaged in nonfarm work, but almost all of them lost such nonfarm wage employment. Women in landless households are also particularly vulnerable in terms of worsened workload and increased tension in the household during COVID‐19. Landed households were also affected through lower prices, lower demand for crops, and difficulties in input access. Women and men differ in levels of stress, fear, and pessimism regarding the effects of COVID‐19. In most households, there were no signs that household task‐sharing and work balance improved, and no clear shift in intrahousehold relations was observed.

Landscapes of opportunity: patterns of young people’s engagement with the rural economy in sub-Saharan Africa

While much has been said in recent years about the importance of engaging rural youth in sub-Saharan Africa’s development, the factual data about how African youth currently engage in rural economies remain sparse. We use recent nationally representative household survey data from six countries to describe the patterns of such engagement. We find that young people participate in agriculture at similar rates to older people. However, participation in non-farm wage employment and business activity changes with age, peaking in the 30s. The likelihood of reporting no activity is greatest for people in their 20s. In more remote places, people leave school earlier and are less likely to engage in the non-farm sector, compared with people in more accessible places. We also find evidence that the non-farm economy is more diversified in relatively more accessible places, offering a larger set of options for economic engagement. We show that ‘landscapes of opportunity’ , defined by economic remoteness and agricultural potential, are an important way of assessing the choices available to young rural people. A key conclusion is that efforts to develop a ‘youth lens’ for rural development should not abandon the mainstays of rural investment strategies such as infrastructure, education, and agricultural R&D.

Income Diversification Among Rural Households in the Mekong River Delta, Vietnam: A Look Back at the Economic Transition Period

Based on five Living Standard Measurement Surveys (LSMSs) conducted over a thirteen year period (1993 to 2006), this paper examined patterns of income diversification in rural areas of the Mekong River Delta (MRD). In terms of quintile specific patterns, over the period 1993-2006, across all quintiles there is a sharp reduction in the time spent on farm self-employment (9.4 to 20.7 percentage points) and an increase in the share of time spent on non-farm wage employment (11.3 to 14.3 percentage points). While there are differences across quintiles, the patterns are broadly similar across expenditure groups and it does not seem that the increase in non-farm wage employment is restricted to particular groups of households. As may be expected given the changes in the activity-allocation pattern, over time, there is an increase in reliance on non-farm wage income by about 6.4 to 11.4 percentage points across quintiles. The interesting aspect is that while households in the poorest income quintiles still continue to rely heavily on agriculture related income (61.2 versus 39.9 percent for the richest quintile) they experience similar patterns of change in terms of a movement from relying on farm income to non-farm sources of income.

Rural labour employment and livelihoods in tribal villages of eastern India

This study examines the changing employment and livelihood patterns of rural labour households in tribal villages of eastern India. The study is based on the high frequency panel data collected under the ICAR-ICRISAT project on Village Dynamics Studies in eastern India from 2010 to 2014. The findings revealed that the work participation rate of landless labour households had a declining trend whereas that of land owning labour households had a mixed trend in tribal villages of Jharkhand. The employment in the farm sector declined for males but increased for women. Employment in non-farm sectors registered an increase in both the genders and the magnitude of the increase was higher in the non-farm sector as compared to the farm sector. Similar trend was observed for wage rate which showed faster growth in the non-farm wage compared to the farm wage. Both the sectors witnessed an increase in the labourer’s wages during the past four years, however, the increase was much higher in the non-farm sector than the farm sector. The study also indicated that male labourers were employed at higher wages than their female counterparts in both sectors but the difference was narrowed down during last four years. A wage determinant analysis revealed that a healthy, educated, landowning adult male labour is likely to get higher wages than others. Non-farm wage employment is emerging as the most important source of income on labour households contributing 63 to 74% to their total income. The survey further revealed that income from farming constituted only 6 to 13% of the total income of labour households, but it showed increasing trend due to implementation of various mega agricultural development projects in the state.

A Study on Determinants of Participation in Rural Nonfarm Employment

The present research has been conducted through field surveys in Rural Tamil Nadu to perceive the factors influencing the rural workers’ participation in the nonfarm activities. A total of 240 workers comprising 143 wage employment and 97 self employment workers were taken in the study from the districts of Dindigul, Karur and Trichy. The nonfarm self employment workers were found to earn more than nonfarm wage employment workers. The empirical evidence from Multinomial result exposed that engaging in nonfarm employment was mostly by “push” factors, but less by “pull” factors at work. The result of Multinomial Logit Model also showed that there was difference in the effect of explanatory variables on participation of households in nonfarm wage and self employment activities. The explanatory variables such as age, educational status, community, family size did not emerge as significant factors. However the variables such as marital status, distance of travel, land holding, borrowing and livestock are the determinant factors of rural nonfarm (RNF) employment.

Determinants of non-farm employment and non-farm earnings in Ecuador: Cristian Vasco and Grace Natalie Tamayo

This article analyses the determinants of both participation in non-farm employment and nonfarm earnings in Ecuador. Using the Dubin-McFadden two-step estimation method, the results show that women are more likely than men to engage in non-farm self-employment but earn significantly less than men employed in the non-farm sector. Non-farm wage employment is a common choice among more educated individuals in landless households, while farm wage employment seems to be the only source of employment for uneducated landless people. Participation in non-farm work is more likely in areas located near medium-sized cities with dynamic economies. Finally, there are regional differences in employment patterns which appear to be associated with both the availability and the quality of land. This information is relevant in relation both to rural population growth and to the continuous process of land fragmentation in rural Ecuador.

Farm-level adaptation to climate change in Western Bangladesh: An analysis of adaptation dynamics, profitability and risks

Using long-term district-level climate data and a case study from a drought-prone village in western Bangladesh, this research explored trends in climate change, and analysed farmers’ adaptation dynamics, profitability and risks. This is the first study of its kind for drought-prone areas in Bangladesh.Farmers perceived climate changes included increases in temperature and decreases in rainfall which were as consistent with the trends of Chuadanga climate records. Farmers’ adaptation measures included changes in cropping systems, cropping calendars, crop varieties, agronomic practices, crop diversification and improved animal husbandry. Reducing environmental stress, ensuring self-sufficiency in staple crops (mainly rice) and other crop production practices, and enhancing economic viability of farm enterprises have underpinned these adaptations. Off-farm and non-farm wage employment, temporary migration, self-employment and educating children, constituted the core non-farm adaptation strategies.Emerging cropping systems like maize/cucumber and maize/stem amaranth/rice were economically more viable than the traditional rice/rice and rice/maize systems. Despite some uncertainties, farming was preferred to off-farm work, generating higher returns to labour for all cropping systems. Limited access to stress-tolerant varieties, extension services and affordable agricultural credit, combined with high production costs, variability in crop yields and output prices, are the main barriers to adaptation. Stronger agricultural research and support services, affordable credit, community-focussed farming education and training are critically important for effective adaptation to climate change.

Determinants of Non-farm Micro and Small Enterprise Participation in Rural Ghana

The non-farm sector is critical for the socio-economic development of Ghana especially the rural poor. Literature suggest that people engage in non-farm enterprises as a way out of poverty or a survival strategy, perhaps as a substitute for the landless. This paper analyses the determinants of individual participation in non-farm enterprises and the intensity of participation. The paper uses EGC/ISSER Socio-Economic Panel Survey data collected in 2009. The paper estimated the determinants of participation using a probit model and then estimated the intensity of participation using a truncated regression model. The results indicate that majority of women (about 73%) are engaged in non-farm enterprises in rural Ghana. The study found that females tended to participate more in non-farm self-employment and are less likely to participate in non-farm wage employment. The results further showed that individual characteristics such as the gender of the individual, being head of a household, being the spouse of a household head, having formal education, age of the individual, having access to credit, possessing a mobile phone, per capita landing holding and ownership of livestock influenced the participation of individuals in self-and wage employment. Results from truncated regression model for self-employed enterprises showed that having access to mobile phones, owning more livestock and electricity are important in determining the intensity of participation in self-employed enterprises. For wage-employment, being a household head, spouse of household head, having access to mobile phone and owning more livestock increased the number of days working on wage employment. Education is relevant for employment in the non-farm sector especially wage-employment. Government should play a lead role in making formal education accessible to the rural people. Deliberate policies should focus on addressing critical factors such as access to credit, mobile phone, electricity and education which are relevant for increasing participation intensity in rural enterprises.

The Nexus between livelihood diversification and farmland management strategies in rural Ethiopia

AbstractThe purpose of this study was to determine whether or not livelihood diversification strategies are significant predictors of rural households’ farmland management practices. To this end, the two-limit Tobit econometric model was employed to analyse the nexus between livelihood diversification and farmland management. The study incorporated 151 farm households in Gozamin District, East Gojjam, in Ethiopia. A survey questionnaire was used to gather data. Both descriptive and inferential statistics were used as methods of data analysis. The result indicated that livelihood diversification, measured by the inverse Herfindahl–Hirschman diversity index, has a positive and significant effect on sustainable land management activities. Besides, farm households who participated in agricultural extension packages and those engaged in farm cooperatives and in non-farm wage employment activities joined significantly more in sustainable rural land management practices. The integrated rural livelihood and susta...

Distributional effects of non-farm incomes in a Malaysian rice bowl

Purpose – The purpose of this paper is to identify the structure of household income and examine the effects of non-farm incomes on the income distribution of farm households in a relatively developed rural area of the Malaysian rice bowl. Design/methodology/approach – The non-farm incomes were disaggregated into different components to determine the contribution of each income source to total household income and overall inequality. The income distribution and decomposition was examined using the Gini decomposition method. Findings – It was found that almost 71 percent of the households in the sample had at least one source of non-farm income. On average, non-farm incomes contributed about 33 percent to total household income. Non-farm wage employment was the dominant source of non-farm income, accounting for almost 26 percent of overall household income. The farm incomes, especially the paddy incomes were found to be the inequality-decreasing income source. The study also confirmed the proposition that the non-farm incomes were the inequality-increasing income source as they contributed up to 35 percent of the overall income inequality. Originality/value – Previous studies have found that non-farm incomes have different effects on income inequality of rural communities, especially those in the rice granary areas situated in less developed states of Malaysia, where poverty is still a problem. This study is significant because it identifies the effect of certain incomes on the overall income inequality among farm households in the granary areas located in a relatively developed rural area. The studied areas are characterized by an intensive paddy production and a rapid development in business and industrial activities, and hence, providing non-farm employment opportunities to the rural farmers. Therefore, this study shows the income structure and how farm and non-farm incomes affect the overall income distribution of the paddy farmers.

Impact of Nonfarm Activity on Rural Income Inequality in South 24 Parganas District of West Bengal§

The impact of non-farm activity on rural income inequality in the South 24 Parganas district of West Bengal has been studied. The non-agricultural activities play a key role in shoring up income and employment opportunities for the rural work force in this district. The average annual income of nonfarm families ( 108662) is almost double to that of farm families ( 56081). The results of Gini coefficient decomposition have indicated that nonfarm income is the largest component (44.05%) of total income, followed by farm income (39.41%). The non-farm income contributes largest to the overall inequality (58.27%) in which non-farm self-employment activity increases the total income inequality, while non-farm wage employment decreases it. The analysis of factors influencing participation of households in different income generating activity showed that human capital endowed with formal and informal education are engaged more in nonfarm activities. The study has suggested development of both farm and non-farm sectors simultaneously to reduce rural income inequality.

Income diversification of migrant colonists vs. indigenous populations: Contrasting strategies in the Amazon

How do migrant colonists and indigenous populations differ in their land and labor allocation in the Amazon, and what does this imply for their income levels/livelihoods and the environment? We address this by analyzing patterns of on- and off-farm employment of rural populations, both mestizo and indigenous, in the Ecuadorian Amazon. We use data from an unusual survey that covers both mestizo and indigenous households. As elsewhere in rural areas of the developing world, off-farm employment is found to be the principal income source for 68% of the population and accounts for 53% of total household income on average. Within off-farm employment, farm wage employment is most common for the poor, who usually have little human (education) or natural capital (agricultural land). For educated individuals, in contrast, non-farm wage employment is commonly the choice. In the Amazon, the government (national, provincial, municipal) is the main employer, which is linked to recent large government investment in infrastructure and decentralization, leading to significant expansion of non-farm employment opportunities for rural populations close to major towns. The implications of this for livelihoods, sustainable development and the environment are explored in the conclusions.

Study on Livelihood through Adaptation and Diversification in Flood Prone Areas in West Bengal

The study points out the need for third party intervention in promoting the livelihood patterns which are less exposed to the damaging effects of flood. Self-employment in small business or trading is a good option for households to supplement their streams of income. But such business even though required small capital, required at least some degree of training and skills development. Therefore, the financing and consultancies agencies can intervene. Promotion of ancestral occupation based on traditional skills and local level resources may be considered. Once again intervention of government and non-government organizations is highly required. Similarly, non-farm wage employment can also be promoted by introduction of “year round” public projects and employment guarantee schemes. Promotion of activity-wise micro financing, self-help groups may be involved. However, none of the areas as identified can be taken sufficient to substitute the flood risk prone livelihoods as most of them are directly or indirectly dependent on agriculture in the context of a farming community. DOI: http://dx.doi.org/10.3126/ijasbt.v2i4.11217Int J Appl Sci Biotechnol, Vol. 2(4): 446-450

Income diversification strategies among rural households in developing countries

Purpose– The purpose of this paper is to examine the income strategies adopted by rural households in Ghana and analyzes the determinants of households’ choice of income portfolio.Design/methodology/approach– A multinomial logit approach is employed by the paper to investigate the determinants of various income strategies adopted by households in rural Ghana.Findings– Results indicate that household characteristics, location and infrastructure all play a role in explaining the adoption of income strategies other than a purely on-farm strategy by households. Education is a key determinant of income strategies involving non-farm wage employment, while access to credit and electricity play important roles in non-farm self-employment income strategies.Practical implications– The findings of the paper call for a promotion of off-farm income opportunities to complement farm incomes and to enhance access of rural households to these sources of income.Originality/value– The paper models rural household income portfolios into mutually exclusive categories which enables the application of the multinomial logit approach. The paper deviates from mainstream rural income diversification literature that has focussed on assessing the determinants of income shares.

‘Recession push’ and ‘prosperity pull’ entrepreneurship in a rural developing context

In this paper, the ‘recession push’ and the ‘prosperity pull’ hypotheses are used to analyse the effect of growing non-farm wage employment on entrepreneurship in a rural developing context. Data are collected in a rural household survey in 110 communes in central Vietnam which includes subjective owner assessments of reasons for starting non-farm businesses. This way it is possible to separately test the two hypotheses by distinguishing opportunity and necessity entrepreneurs. We use clustered probit regression analyses and control for possible endogeneity in order to predict participation in entrepreneurship. The results show that better access to non-farm wage employment increases the likelihood of becoming an opportunity entrepreneur but has no effect on necessity entrepreneurship. This, therefore, supports the ‘prosperity pull’ hypothesis but not the ‘recession push’ hypothesis. The growing non-farm economy is likely to accelerate the emergence of opportunity entrepreneurship in rural areas. However, necessity entrepreneurs are suffering from a lack of individual and household assets which pushes them into entrepreneurship regardless of non-farm job opportunities in the surrounding area.

Human capital investment and long-term poverty reduction in rural Mexico

By focussing on human capital investment, the Mexican Oportunidades program will influence the economic choices of the rural poor. To understand how beneficiaries may alter their behaviour as a result of this intervention, this paper uses administrative data to analyse the economic activities of the rural poor. Results indicate that investments in education are likely to shift recipients from agricultural wage employment towards non-farm wage employment. The magnitude of this impact will be influenced by household assets and by the location of the household. The results suggest the need for policies that complement the government's focus on human capital investment. Copyright © 2010 John Wiley & Sons, Ltd.

Household income strategies and natural disasters: Dynamic livelihoods in rural Nicaragua

This paper assesses the impact of hurricane Mitch on livelihood strategies of rural households in Nicaragua. Through destruction or distress sales of productive assets, a hurricane or another natural hazard could induce people with relatively remunerative livelihoods to choose more defensive strategies which allow them to survive, but at a permanently lower welfare level than before. Using panel data from before and after hurricane Mitch, we find that livelihood strategies can be grouped into three welfare categories. Annual farming and farm employment generate low incomes, whereas nonfarm wage employment and livestock farming result in relatively high incomes. Perennial farming, nonfarm self-employment and annual cropping with nonfarm employment take an intermediate position. High welfare strategies were associated with high levels of capital, and the number of people involved was very similar between different years, suggesting that households following low-welfare strategies were trapped in poverty. However, many households moved actively between strategies of different welfare levels. This indicates that there was no absolute poverty threshold, but also that being able to initiate a relatively profitable livelihood strategy was no guarantee that this strategy could be maintained. There is no evidence that hurricane Mitch affected livelihood strategy transitions: livelihood mobility was similar for households inside and outside Mitch-affected areas.

Literacy Sharing, Assortative Mating, or What? Labour Market Advantages and Proximate Illiteracy Revisited

This paper explores the relationship between household literacy and the labour market outcomes of illiterate household members which Basu, Narayan and Ravallion (2002) report using Household Income and Expenditure data from Bangladesh. BNR attribute a considerable wage premium for proximate-illiterate women in off-farm employment to labour productivity gains from intra-household literacy sharing. This wage premium also suggests that women may be more efficient recipients of literacy externalities than men. We propose that any such relationship might not be due to higher labour productivity but may have other explanations such as systematically different and unobserved attributes of illiterate females married into literate households. We also pay attention to the negative selection of illiterate females into non-farm wage employment, which contrary to received wisdom suggests that household literacy may not be unambiguously progressive for females. We propose that the widely reported finding that female literacy impacts more positively than male literacy on child wellbeing may not extend into similar effects in other realms of household activities where males may be more efficient transmitters of literacy externalities. Using more recent Bangladesh and similar Indian data we find somewhat different results for household literacy externalities on non-farm wage employment of household illiterates, and also show that any such effects are conditioned on the social identity of the individuals, their geographic location and their sector of employment. We caution against drawing conclusions from one finding using one data set apparently ignoring contrary findings, where that finding is congruent with fashionable development views, such as the advantages of females as generators of development.