Rural Nonfarm Incomes in Nicaragua

This paper examines nonfarm incomes of rural Nicaraguan households using a nationwide survey (LSMS) from 1998. The key findings are as follows. (a) Rural nonfarm income (RNFI) constitutes 41% of rural household incomes. (b) RNFI is much more important than farm wage-labor income. (c) RNFI tends to be relatively concentrated geographically and socioeconomically, toward the rural areas of the Managua zone and the Rest-of-Pacific zone, which are denser in infrastructure and population, and toward the upper income quartile of rural households. This concentration implies high entry barriers and capital requirements for rural nonfarm activity that the poor are simply not equipped to overcome. Equipping the rural poor through training and acquisition of diverse forms of capital to have a chance at the higher return nonfarm jobs would be a major step toward helping them to share the benefits of the rural nonfarm economy. (d) Self-employment (small enterprise) income in manufactures is very minor, probably due to the ease of obtaining manufactured goods from urban industries and imports. Wage employment constitutes the bulk of RNFI (despite it receiving little attention in development programs and debate). (e) Three-quarters of RNFI is in the service sector, and only one-quarter is from manufactures; that can be contrasted with the emphasis on small manufactures enterprises in rural development programs and research. (f) Education, road access, as well as access to electricity and water were found to be important to nonfarm incomes.     

Rural Nonfarm Employment and Incomes in Chile

This article analyzes the evolution of rural nonfarm employment (RNFE) and income in Chile during 1990–96. The data used come from the National Socioeconomic Survey (CASEN), and from a household survey undertaken by the authors in two municipalities in 1999. The latter contrasted two zones, very different in terms of economic dynamism and rural poverty. We show that during the period, RNFE and incomes increased 10% and 18%, respectively, in 1996, reaching 39% of rural employment and 41% of rural incomes. The rate of multiactivity (the share of households participating in more than one sector) was only 20%, lower than expected, indicating a tendency toward economic specialization in rural income strategies. The determinants of such employment are mainly household characteristics, in particular variables related to human capital, such as the age and gender of the household head, and the schooling of the household members, although also important are access to credit and physical capital. The level of nonfarm income of rural households is determined mainly by the economic context, in particular the economic level and dynamism of the overall zone and the quality of the roads. It is proposed that policies to develop RNFE should be geared to zone characteristics, and should in general favor investments in education, in roads, and in access to credit. Moreover, households headed by women should be the object of special attention. To promote such policies, it will be necessary to address important gaps and weaknesses in the public institutional structure.     

Nonfarm Employment and Poverty Alleviation of Rural Farm Households in Honduras

This paper analyzes the role of nonfarm income of rural farm households in Honduras. It uses the national income and expenditure survey from 1993 to 1994. Income from nonfarm wage and self-employment represents 16–25% of farm household income and is especially important for middle and higher income strata. Nonfarm wage labor is geographically concentrated in small rural towns and in the industrial free zones located in the Northern region, while self-employment is particularly developed in the Southern region. Access to nonfarm wage employment is confined to educated individuals that belong to large households, while female members of wealthier households are mainly involved in self-employment. Food security is strongly enhanced through the engagement in nonfarm activities. Moreover, nonfarm income enables farmers to purchase external inputs for improving yields and labor productivity. Suitable policies to enhance nonfarm employment include education, training, and technical assistance to reduce labor intensity in agricultural production, as well as public investment and credit services to improve access to nonfarm activities.     

The Determinants of Nonfarm Income Diversification in Rural Peru

This paper shows that in Peruvian rural areas, there has been substantial growth over the past decade in household employment outside of own-farming. At present 51% of the net income of rural households comes from these off-farm activities, and thus they certainly cannot be considered as “marginal.” The reasons households diversify their incomes are several. Access to public assets such as roads and private assets such as education and credit is an important factor in diversification. Increasing access to these assets will help rural households to increase their self-employment as well as wage employment in the nonfarm sector.     

Non‐farm Income Diversification in Rural Ghana: Patterns and Determinants

Abstract: Evidence abounds in the rural livelihoods literature that rural households do not only receive a significant proportion of their incomes from non‐farm sources, but also it is a significant source of employment for rural folks. This paper examines the pattern and determinants of non‐farm income diversification in rural Ghana. Results show that off‐farm income constituted 43 percent of rural household income in 2005/6. Female‐headed households tend to have larger off‐farm income shares compared to male‐headed households. Non‐farm income shares followed the same gender pattern albeit less pronounced. Unlike in Latin America and Asia, in rural Ghana, non‐farm self‐employment income is more important than non‐farm wage‐employment income. Regression results show that the gender composition of households, age, education, and access to credit, electricity and markets are important determinants of multiple non‐farm activities and non‐farm income. The findings call for strategies that can help rural households maximize the benefits from income diversification.     

The Determinants of Nonfarm Activities and Incomes of Rural Households in Mexico,with Emphasis on Education

This paper presents the main results of a study of the effects of education (as well as other household assets) on the choice of activities and incomes of rural Mexican households. Our study examines the various income sources, as well as the education of the household's head and its members. Implications are drawn for rural education and development policies to promote rural nonfarm incomes and employment.     

Intersectoral Transfer,Growth, and Inequality in Rural Ecuador

In this paper we study intersectoral transfer and its impact on the distribution of income in Ecuador. We find that income shares between farm and nonfarm activities are roughly equal, on average, although the rich in rural areas typically receive a greater share of income from nonfarm sources. Thus decomposing inequality by income source reveals that a rise in nonfarm incomes increases inequality. Drawing on a new method to estimate local-level distributional outcomes, growth of the high-productivity nonfarm sector is observed to have a strong and positive association with average consumption and inequality. Growth of the low-productivity nonfarm sector is associated with little change in either average income or income inequality. Irrespective of subsector, growth of the nonfarm sector is associated with a substantial fall in poverty.     

Rural Nonfarm Employment and Incomes in Brazil: Patterns and Evolution

In decades past, a large contingent of workers left farms and small towns to move to the large cities of Brazil. But in the 1990s, not only has this flow subsided, but one even observes an “urbanization” of rural areas via a large increase in nonfarm activities in rural areas during the 1980s and 1990s, especially in the Center-West and Southeast regions of Brazil. Exclusively agricultural rural households have lower incomes than “multiactive households” (those with activities in both the farm and nonfarm sectors) and than nonfarm rural households. One even notes a significant reduction in the number of purely farm households over 1992–97 in all regions of the country.     

Changing Sources of Household Income,Poverty, and Sectoral Inequality in Sri Lanka, 1990–2006

Comparing dynamic changes in household income and poverty among urban, rural, and estate sectors in Sri Lanka from 1990 to 2006, this study finds that a shift of household income away from farm to nonfarm sources is accompanied by a significant improvement in household income and reduction in poverty, particularly in the rural sector. Major contributing factors are the rise in returns to labor, in general, and educated labor, in particular, due to the development of the nonfarm labor market. Persistently low income among estate households can be explained primarily by the limited availability of nonfarm employment opportunities and the low education levels of working members.     

Small Enterprise Growth and the Rural Investment Climate: Evidence from Tanzania*

Abstract: This paper analyzes characteristics of nonfarm enterprises, their employment growth patterns, and constraints in doing business in rural Tanzania. Using unique survey data, we describe a low‐return sector struggling to compete in a challenging business environment. However, about one‐third of rural enterprises are growing fast. Most enterprises engage in agricultural trade. Due to a rapidly growing agricultural sector in recent years, limiting demand‐side constraints, rural enterprise constraints in Tanzania mainly operate from the supply‐side, suggesting that in particular access to finance, road infrastructure and rural cell phone communication is associated with employment growth. A major finding is that subjective and objective measurements of business constraints are broadly comparable. We discuss a number of factors that would help to unleash the full potential of private sector‐led growth in rural areas. Marginal improvements of the rural investment climate matter for growth.     

Self-selection and Earnings of Migrants: Evidence from Rural China

Using data from a rural household survey in China, this paper explores the link between employment choice (nonworking, local farm work, local nonfarm work and migratory work) and migrant earnings. We find significant self-selection in migration. Youths, men, better-educated individuals and those in good health are more likely to migrate. In terms of unobserved characteristics, we find positive selection in migration to be related to the alternatives of not working and local farm work, and negative selection to be related to local nonfarm work. Controlling for self-selection, the wage returns to gender (male), education and health are lower than those obtained from OLS, and the returns to experience are higher. More importantly, we find different self-selection between individuals who have moved as pioneers and migrants from households in which other members have already migrated.     

Effects of Free Trade on Women and Immigrants: CAFTA and the Rural Dominican Republic

We construct a disaggregated rural economywide model with a focus on gender and immigration as well as on the allocation of time to wage work, household production activities, and housework (reproduction). We use this model to simulate the impacts of the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) on rural incomes and welfare in the Dominican Republic. We find that elimination of agricultural import tariffs hurts both agricultural and non-agricultural households, via adverse factor-market effects, but impacts vary substantially by workers’ gender and country of origin. Females and Haitian immigrants tend to fare better than Dominican males, and there are ramifications for both market and non-market activities.     

Choices between different off-farm employment sub-categories: An empirical analysis for Jiangxi Province, China

This paper analyzes the relative importance of four sub-categories of off-farm employment, and the factors driving participation of individuals in these sub-categories for three villages in Jiangxi Province. We find that migration is the most important type of off-farm employment, while agricultural wage employment is a minor activity. Migrant remittances are smaller than household incomes earned from self-employment and local non-farm employment. The results of a multinomial probit analysis explaining off-farm participation decisions show that presence of young children in a household restrains participation in migration, while the presence of elderly persons and a higher level of education stimulate migration. Local wage employment and self-employment are not affected by these factors. The gender bias in access to off-farm employment is largest for agricultural employment and local non-agricultural employment. Land scarcity stimulates participation in migration and local non-agricultural employment, while possibilities to rent land out to other farmers stimulate only migration. The paper ends with policy suggestions for promoting off-farm employment within the own region and for altering the criteria for land distribution to rural households.     

Roles of rural non-farm employment (RNFE) in India: Why RNFE,the conveyor of a shock like COVID 19 is also the key to recovery?

We assess the role of Rural Non-Farm Employment (RNFE) in livelihoods and in likely impacts of shocks like COVID 19. In India’s agri-food system, the preponderance of small farmers with low endowments of human and financial capital implies that, RNFE has been the principal source of poverty reduction. Yet, RNFE is also the most adversely affected by shocks like COVID 19 and the measures adopted to prevent disease spread. To assess the roles of RNFE and possible effects of shocks, we uniquely utilize the recent rounds of nationally representative Periodic Labor Force Surveys (PLFS). To assess the “potential impact” of COVID 19 on workers, by using the large dataset, we match similar workers in different states of employment (SOE) where SOE may partly reflect the situation post shock. Job loss, reduction in work hours, movement across types of employment, casualization within RNFE is possible due to shocks to RNFE. We estimate that SOE in RNFE have significant association with poverty and income. With the data on COVID lockdown periods, we then validate the results to pair with the prospectively assessed impacts. Notwithstanding the effect of shocks, RNFE has the unique potential in recovery, being the prime rural income generator and risk mitigator apart from being characterized by comparatively high growth in female employment and in socially disadvantaged groups in India.     

A longitudinal analysis of racial wage differentials for young nonfarm rural workers

A longitudinal data base is used to estimate racial wage differentials for young nonfarm rural workers for 1968, 1973, and 1978. The empirical results indicate the existence of large wage differentials between young white and young black nonfarm rural workers of both sexes. The results also indicate that the wage differential for young men has increased over time while the differential for young women has decreased slightly over time.     

Women's Economic Status in Rural China: Household Contributions to Male–Female Disparities in the Wage–Labor Market

Rapid industrial growth in China coupled with economic reforms in the rural areas has created a growing demand for rural women's labor, though often at substantially lower wages than those earned by men employed in the same sector. An analysis of data collected in rural Guangdong province suggests that households may contribute to the observed male–female market wage differential through their influence in the formation of individuals' reservation wages. Under these circumstances, external employment opportunities, while no doubt serving to increase the household's overall level of income, may, on their own, be a less effective mechanism for raising the economic status of women. On the contrary, market wage signals may serve to reinforce, rather than to ameliorate, sex-based differences that arise within the household.     

The Origins and Early Impact of the Minimum Wage in Agriculture

This article examines the effects on wages and employment of the minimum wage in agriculture during the interwar period. It finds that the impact of regulation was to raise the wage for agricultural labourers by 13 per cent when it was (re)introduced in 1924, by 15 per cent in the late 1920s, and by more than 20 per cent in the 1930s. The effect on farm employment was to reduce it by about 54,000 (6.5 per cent) in 1929 up to a peak of 97,000 (13.3 per cent) in 1937. The minimum wage lifted out of poverty many families of farm labourers who remained employed, but it significantly lowered the incomes of farmers, particularly during the 1930s.     

China＇s New Rural Income Support Policy： Impacts on Grain Production and Rural Income Inequality

I. Introduction Since the beginning of 2004, the Chinese Government has replaced its centuries-old policy of taxing agriculture by a new policy aimed at subsidizing agriculture and stimulating rural incomes. To this end, agricultural taxes – standing at around 8 percent of agricultural incomes – were drastically reduced. By now they are abolished in most provinces. Inaddition, farmers growing grain receive a direct income subsidy, new seed varieties and mechanization are subsidized, and la…     

Some poor and invisible women: Farm labourers in South Africa

This article presents the results of a prevalence survey carried out in 1994 to assess the socio‐economic significance of waged farmwork in parts of the Eastern Transvaal (now Mpumalanga). The survey was designed to shed light on the question of how many rural households depend for their survival on the availability of wage employment opportunities for women on farms. The results support the view that economists and statisticians in South Africa have paid insufficient attention to the importance of unrecorded, or statistically ‘invisible’ agricultural wage employment to the rural population. In particular, the importance of women's work as waged farm labourers has not received the attention it deserves for policy purposes. Women's wages and working conditions on all types of farms are probably the critical determinants of the standard of living of many tens of thowsands of households in Mhala and Mapulaneng, and of many millions of the poorest households in South Africa as a whole.     

Non‐farm employment and incomes in rural Cambodia

Rural households in Cambodia derive income from various sources. On average, non‐farm income accounts for more than 60 per cent of total household income. However, the average masks the substantial heterogeneity of non‐farm employment. We account for this heterogeneity and find significant differences in non‐farm participation and incomes across segments of the income distribution. The poor and the less well‐educated participate less in the non‐farm sector, and when they do work in the non‐farm sector, they work in low‐paid jobs and earn lower incomes. Accounting for endogeneity and sample selection issues, we conduct an empirical enquiry of the determinants of participation in non‐farm activities and of non‐farm incomes. As expected, we find that education plays a major role in accessing more remunerative non‐farm employment. Interestingly, we do not find evidence that women, ethnic minorities, or the land‐poor are disadvantaged in access to the non‐farm sector. Geographical location plays a role in access to and income from non‐farm employment, indicating the importance of local context.