IDEAS home Printed from https://ideas.repec.org/a/spr/ijlaec/v66y2023i3d10.1007_s41027-023-00452-7.html
   My bibliography  Save this article

The Slow Emergence of Rural Non-farm Sector Employment in India: Shift or Diversification?

Author

Listed:
  • Vinoj Abraham

    (Ministry of Commerce Chair)

Abstract

The rather slow transition in the rural employment from farm to non-farm sector in India is well documented. In the structural transformation thesis, rural non-farm sector (RNFS) is a key interlink between rural and urban sector, and is a catalyst for rural change. RNFS may also reduce risk under adverse agricultural conditions. In India, construction sector is the single most important source of non-farm employment in rural areas. Moreover, even within the agricultural household a substantial share of the work time is increasingly spent on non-farm activities, mostly on construction. The household and individual movement to RNFS is conceptualised as shift or diversification. Diversification in employment would appeal to risk mitigation, as opposed to shift which may be more akin to earnings maximisation. Analysis shows that households are moving out of agriculture and are increasingly becoming mixed or non-farm households. The emerging trend seems to be diversification of households, with shift of individuals within households to RNFS. Non-farm households are higher in the economic ladder but the gap between the agricultural household and non-farm household seem to be reducing. Casualisation is declining, but it is primarily due to the movement of workers to being self-employed in the agricultural households. There is no decline in casualisation within non-farm and mixed households. Possession of land is now increasing among non-farm households who uses this probably for speculative purposes. The relationship of the urban and the rural is contentious with the emerging agri-competing industrial sectors in the RNFS.

Suggested Citation

  • Vinoj Abraham, 2023. "The Slow Emergence of Rural Non-farm Sector Employment in India: Shift or Diversification?," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 66(3), pages 661-685, September.
  • Handle: RePEc:spr:ijlaec:v:66:y:2023:i:3:d:10.1007_s41027-023-00452-7
    DOI: 10.1007/s41027-023-00452-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s41027-023-00452-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s41027-023-00452-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Peter Lanjouw & Rinku Murgai & Nicholas Stern, 2013. "Nonfarm diversification, poverty, economic mobility, and income inequality: a case study in village India," Agricultural Economics, International Association of Agricultural Economists, vol. 44(4-5), pages 461-473, July.
    2. Haggblade, Steven & Hazell, Peter & Reardon, Thomas, 2010. "The Rural Non-farm Economy: Prospects for Growth and Poverty Reduction," World Development, Elsevier, vol. 38(10), pages 1429-1441, October.
    3. C. Peter Timmer, 2009. "A World Without Agriculture: The Structural Transformation in Historical Perspective," Books, American Enterprise Institute, number 43120, September.
    4. Bruno Dorin & Jean Charles Hourcade & Michel Benoit-Cattin, 2013. "A World without Farmers ? The Lewis Path Revisited," Working Papers hal-00866413, HAL.
    5. Frank Ellis, 1998. "Household strategies and rural livelihood diversification," Journal of Development Studies, Taylor & Francis Journals, vol. 35(1), pages 1-38.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ambler, Kate & Herskowitz, Sylvan & Maredia, Mywish K., 2021. "Rural Labor and Long Recall Loss," Staff Paper Series 316616, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Ambler, Kate & Herskowitz, Sylvan & Maredia, Mywish K., 2021. "Are we done yet? Response fatigue and rural livelihoods," Journal of Development Economics, Elsevier, vol. 153(C).
    3. Kamaldeen Mohammed & Evans Batung & Moses Kansanga & Hanson Nyantakyi-Frimpong & Isaac Luginaah, 2021. "Livelihood diversification strategies and resilience to climate change in semi-arid northern Ghana," Climatic Change, Springer, vol. 164(3), pages 1-23, February.
    4. Zeeshan & Geetilaxmi Mohapatra & Arun Kumar Giri, 2022. "How Farm Household Spends Their Non-farm Incomes in Rural India? Evidence from Longitudinal Data," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(4), pages 1967-1996, August.
    5. Poignant, Adrian, 2023. "Small-scale mining and agriculture: Evidence from northwestern Tanzania," Resources Policy, Elsevier, vol. 83(C).
    6. Felkner, John S. & Lee, Hyun & Shaikh, Sabina & Kolata, Alan & Binford, Michael, 2022. "The interrelated impacts of credit access, market access and forest proximity on livelihood strategies in Cambodia," World Development, Elsevier, vol. 155(C).
    7. Baumgartner, Philipp & von Braun, Joachim & Abebaw, Degnet & Müller, Marc, 2015. "Impacts of Large-scale Land Investments on Income, Prices, and Employment: Empirical Analyses in Ethiopia," World Development, Elsevier, vol. 72(C), pages 175-190.
    8. Mukherjee, Swayambhu & Kar, Saibal, 2020. "Leveraging Non-Farm Income: Micro-evidence of Occupational Choice for Rural Households in India," MPRA Paper 109940, University Library of Munich, Germany.
    9. Riithi, Alexander Njuguna & Irungu, Patrick & Munei , Kimpei, 2015. "Determinants Of Choice Of Alternative Livelihood Diversification Strategies In Solio Resettlement Scheme, Kenya," Dissertations and Theses 269714, University of Nairobi, Department of Agricultural Economics.
    10. Giller, Ken E. & Andersson, Jens & Delaune, Thomas & Silva, João Vasco & Descheemaeker, Katrien & van de Ven, Gerrie & Schut, Antonius G.T. & van Wijk, Mark & Hammond, Jim & Hochman, Zvi & Taulya, God, 2022. "IFAD Research Series 83: The future of farming: who will produce our food?," IFAD Research Series 322005, International Fund for Agricultural Development (IFAD).
    11. Atamanov, Aziz & Van den Berg, Marrit, 2012. "Determinants of the rural nonfarm economy in Tajikistan," MERIT Working Papers 2012-080, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. Huang, Jikun & Shi, Pengfei, 2023. "IFAD Research Series 90: Rural Transformation, Income Growth and Poverty Reduction by Province in China in the Past Four Decades," IFAD Research Series 335374, International Fund for Agricultural Development (IFAD).
    13. Carol Newman & Christina Kinghan, 2015. "Economic transformation and the diversification of livelihoods in rural Vietnam," WIDER Working Paper Series 064, World Institute for Development Economic Research (UNU-WIDER).
    14. Sudha Narayanan & Sharada Srinivasan, 2020. "No country for young women farmers: A situation analysis for India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2020-041, Indira Gandhi Institute of Development Research, Mumbai, India.
    15. Fertö, Imre, 2014. "The Structural Transformation in Central and Eastern European Agriculture," CEI Working Paper Series 2014-9, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    16. Gautam Kumar Das & Nijara Deka, 2023. "Rural Non-farm Sector Employment in the North-Eastern Region of India: Determinants and Implications for Well-being," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 17(3-4), pages 279-314, August.
    17. Ward Anseeuw & Thomas Jayne & Richard Kachule & John Kotsopoulos, 2016. "The Quiet Rise of Medium-Scale Farms in Malawi," Land, MDPI, vol. 5(3), pages 1-22, June.
    18. Zerihun Berhane Weldegebriel & Martin Prowse, 2013. "Climate-Change Adaptation in Ethiopia: To What Extent Does Social Protection Influence Livelihood Diversification?," Development Policy Review, Overseas Development Institute, vol. 31, pages 35-56, November.
    19. Alwin D'Souza & Ashok K. Mishra & Stefan Hirsch, 2020. "Enhancing food security through diet quality: The role of nonfarm work in rural India," Agricultural Economics, International Association of Agricultural Economists, vol. 51(1), pages 95-110, January.
    20. Imai, Katsushi S. & Gaiha, Raghav & Thapa, Ganesh, 2015. "Does non-farm sector employment reduce rural poverty and vulnerability? Evidence from Vietnam and India," Journal of Asian Economics, Elsevier, vol. 36(C), pages 47-61.

    More about this item

    Keywords

    Rural non-farm sector employment; Diversification; Rural–urban linkages; Rural transformation; India;
    All these keywords.

    JEL classification:

    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:ijlaec:v:66:y:2023:i:3:d:10.1007_s41027-023-00452-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.