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Can skill diversification improve welfare in rural areas? Evidence from Bhutan

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  • Natalie Chun
  • Makiko Watanabe

Abstract

Income growth in rural areas is a considerable challenge to further poverty reduction and economic development. Using a survey of rural Bhutanese households, we investigate the impacts of a vocational skills training programme that was intended to diversify incomes outside agriculture. We find that the programme had limited positive impacts along various economic and psychosocial dimensions, but that it diversified household incomes into the basic construction skill areas that it provided. Notably, the programme did raise incomes for trainees in non-competitive labour markets where trainees accounted for only a small percentage of the overall population. The results and findings from qualitative assessments suggest that: a greater emphasis on creating a mechanism to connect the training programme with income-generating opportunities via job placement services, entrepreneurship or mentoring services is needed -- especially in competitive labour markets where there are too many trainees in relation to the population; refining the curriculum and extending the training time to allow trainees to develop their skills may be important; and encouraging greater equality in the skill development process may require providing more female-friendly training that has flexibility in training time and venues and focuses on other skill areas.

Suggested Citation

  • Natalie Chun & Makiko Watanabe, 2012. "Can skill diversification improve welfare in rural areas? Evidence from Bhutan," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 4(2), pages 214-234, June.
    • Handle: RePEc:taf:jdevef:v:4:y:2012:i:2:p:214-234
    DOI: 10.1080/19439342.2012.674965
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    1. Betcherman, Gordon & Olivas, Karina & Dar, Amit, 2004. "Impacts of active labor market programs : new evidence from evaluations with particular attention to developing and transition countries," Social Protection Discussion Papers and Notes 29142, The World Bank.
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    1. Tarryn Kille & Retha Wiesner & Seung-Yong Lee & Melissa Johnson Morgan & Jane Summers & Daniel Davoodian, 2022. "Capital Factors Influencing Rural, Regional and Remote Women’s Entrepreneurship Development: An Australian Perspective," Sustainability, MDPI, vol. 14(24), pages 1-25, December.
    2. López Mourelo, Elva & Escudero, Verónica, 2017. "Effectiveness of Active Labor Market Tools in Conditional Cash Transfers Programs: Evidence for Argentina," World Development, Elsevier, vol. 94(C), pages 422-447.
    3. Kusio, Tomasz & Kudełko, Joanna & Borges, Alexandra & Delic, Anamarija & Stroila, Iulia, 2022. "Are there any differences in rural development challenges within European countries? Social and economic contexts from EU rural leaders," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(5), December.
    4. Kim, Youngwan & Sohn, Hyuk-Sang & Park, Bokyeong, 2019. "Make the village better: An evaluation of the Saemaul Zero Hunger Communities Project in Tanzania and Bangladesh," World Development, Elsevier, vol. 124(C), pages 1-1.
    5. Maria Lúcia Pato & Aurora A.C. Teixeira, 2013. "Twenty years of rural entrepreneurship: a bibliometric survey," FEP Working Papers 516, Universidade do Porto, Faculdade de Economia do Porto.

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