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How Important are Locational Characteristics for Rural Non-agricultural Employment? Lessons from Brazil

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Author Info

  • Jonasson, Erik
  • Helfand, Steven M.

Abstract

Summary By paying particular attention to the local economic context, this paper analyzes the factors that influence rural non-agricultural employment and earnings. The empirical analysis is based on the Brazilian Demographic Census, allowing for disaggregated controls for the local economy. Education stands out as one of the key factors that shape employment outcome and earnings potential. Failure to control for locational effects, however, can lead to biased estimation of the importance of individual and household characteristics. The empirical results show that local market size, distance to population centers, and other proxies for transactions costs play an important role in shaping non-agricultural employment prospects and earnings.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 38 (2010)
Issue (Month): 5 (May)
Pages: 727-741

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Handle: RePEc:eee:wdevel:v:38:y:2010:i:5:p:727-741

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Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: rural non-agricultural employment; economic geography; Latin America; Brazil;

References

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  1. Graziano da Silva, Jose & Eduardo Del Grossi, Mauro, 2001. "Rural Nonfarm Employment and Incomes in Brazil: Patterns and Evolution," World Development, Elsevier, vol. 29(3), pages 443-453, March.
  2. Escobal, Javier, 2001. "The Determinants of Nonfarm Income Diversification in Rural Peru," World Development, Elsevier, vol. 29(3), pages 497-508, March.
  3. Dominique van de Walle & Dorothyjean Cratty, 2004. "Is the emerging non-farm market economy the route out of poverty in Vietnam?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(2), pages 237-274, 06.
  4. Yang, Dennis T. & An, Mark Yuying, 1997. "Human Capital, Entrereneurship, and Farm Household Earnings," Working Papers 97-03, Duke University, Department of Economics.
  5. Ellis, Frank, 2000. "Rural Livelihoods and Diversity in Developing Countries," OUP Catalogue, Oxford University Press, number 9780198296966.
  6. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  7. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
  8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  9. Alberto Isgut, 2004. "Non-farm Income and Employment in Rural Honduras: Assessing the Role of Locational Factors," Journal of Development Studies, Taylor & Francis Journals, vol. 40(3), pages 59-86.
  10. Sonia Laszlo, 2005. "Self-employment earnings and returns to education in rural Peru," Journal of Development Studies, Taylor & Francis Journals, vol. 41(7), pages 1247-1287.
  11. Foster, Andrew D. & Rosenzweig, Mark R., 2008. "Economic Development and the Decline of Agricultural Employment," Handbook of Development Economics, Elsevier.
  12. World Bank, 2003. "Rural Poverty Alleviation in Brazil : Toward an Integrated Strategy," World Bank Publications, The World Bank, number 15115, March.
  13. Janvry, Alain de & Sadoulet, Elisabeth, 2001. "Income Strategies Among Rural Households in Mexico: The Role of Off-farm Activities," World Development, Elsevier, vol. 29(3), pages 467-480, March.
  14. Reardon, Thomas & Berdegue, Julio & Escobar, German, 2001. "Rural Nonfarm Employment and Incomes in Latin America: Overview and Policy Implications," World Development, Elsevier, vol. 29(3), pages 395-409, March.
  15. Lanjouw, Peter, 2001. "Nonfarm Employment and Poverty in Rural El Salvador," World Development, Elsevier, vol. 29(3), pages 529-547, March.
  16. Corral, Leonardo & Reardon, Thomas, 2001. "Rural Nonfarm Incomes in Nicaragua," World Development, Elsevier, vol. 29(3), pages 427-442, March.
  17. Awudu Abdulai & Christopher L. Delgado, 1999. "Determinants of Nonfarm Earnings of Farm-Based Husbands and Wives in Northern Ghana," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 117-130.
  18. Ferreira, Francisco H. G. & Lanjouw, Peter, 2001. "Rural Nonfarm Activities and Poverty in the Brazilian Northeast," World Development, Elsevier, vol. 29(3), pages 509-528, March.
  19. Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics, Blackwell, vol. 26(1), pages 1-23, October.
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Citations

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Cited by:
  1. Atamanov, Aziz & Van den Berg, Marrit, 2012. "Determinants of the rural nonfarm economy in Tajikistan," MERIT Working Papers 080, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  2. Chloé DUVIVIER & Mary-Françoise RENARD & Shi LI, 2012. "Are workers close to cities paid higher non-agricultural wages in rural China?," Working Papers 201205, CERDI.
  3. Atamanov, Aziz & Van den Berg, Marrit, 2012. "Determinants of the rural nonfarm economy in Tajikistan," MERIT Working Papers 080, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  4. Fitz, Dylan, 2013. "Development Chutes and Ladders: A Joint Impact Evaluation of Asset and Cash Transfers in Brazil," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150254, Agricultural and Applied Economics Association.
  5. Atamanov, Aziz & Van den Berg, Marrit, 2011. "Microeconomic analysis of rural nonfarm activities in the Kyrgyz Republic: What determines participation and returns?," MERIT Working Papers 011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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