Rural Non-Farm Employment Diversification in India: Determinants and Effect on Wages and Household Consumer Expenditure

Abstract

Mounting evidence on rural livelihoods point towards a gradual transition of households from agriculture to rural non-farm sector (hereafter RNFS) with employment in the former sector now has become rarely a sufficient means of living (Barrett, Reardon and Webb, 2001; Ellis, 1998; Haggblade, Hazell and Reardon, 2010; Lanjouw and Shariff, 2004; Lanjouw and Lanjouw, 2001; Nakajima, Otsuka and Yamano, 2018). Although the RNFS was envisioned to wither away with economic growth, this residual sector, in turn, has transformed into an important livelihood strategy with its substantial contribution to employment and income. Its share of employment ranges from 32 per cent in Asia, 40 per cent in Latin America and 42 per cent in Africa (Reardon, 1997) and share of income accounts for 35 to 50 per cent (Haggblade et al, 2010).