Nonfarm employment and household food security: evidence from panel data for rural Cambodia

Nonfarm employment has been increasingly important in improving food security of rural households in the developing world. In this paper, we (1) determine the factors explaining the participation in nonfarm employment and nonfarm income of rural households by employing a two-part random effects econometric model, and (2) examine the effects of nonfarm employment on rural household food security indicators by combining the propensity score matching with the difference-in-differences approach. We used a panel dataset of 561 households in 30 villages of Stung Treng province in Cambodia collected in 2013 and 2014. Our sample was divided into two groups, households with nonfarm employment, and households without nonfarm employment. Our findings show that (1) nonfarm employment contributed about 32% to total annual household income for the whole sample and 57% for the households with nonfarm employment; (2) participation in nonfarm employment and nonfarm income were significantly influenced by the education level of household heads, numbers of motorbikes and mobile phones, conditions of roads to the villages, farmland size, number of income shocks, and the distance from home to the nearest market; (3) there was no significant difference in terms of food availability between households with and households without nonfarm employment but the former have improved food access, utilization, and stability. We suggest that promoting rural education, improving road conditions, and empowering rural households to cope with income shocks would contribute to developing nonfarm employment and consequently improve food security of rural households.