Stepping out of Palanpur: employment outside Palanpur

As India integrates into the global economy, its villages are integrating into a rapidly growing urban economy. One of the links through which this is happening is labour markets, where demand for labour to undertake non-farm jobs has been growing. This has led to a rise in the share of non-farm incomes in total income. These jobs often take people out of the village to engage in labour markets in nearby urban/semi-urban centres. The village of Palanpur is an illustration of a similar trend and we delve deeper into understanding what has led to the rise of non-farm incomes for the last 25 years. An important first step in this endeavour is to understand how villagers allocate time among different job activities and how non-farm activities takes them out of the village. In this paper, we take this first step by examining trends in employment outside the village of Palanpur over the period 1983-2008. We classify activities as primary and subsidiary on the basis of the amount of time spent doing them. We find that, compared to 1993 and 1983, a higher proportion of the adult male labour force works outside the village in 2008. The key driver of outside work is subsidiary jobs that last for short periods of time. Somewhat surprisingly we find that the share of people who work outside the village as a primary occupation has not risen since 1983. This can be understood, however, as part of a process of selective migration. We find evidence, for example, that people who held regular jobs outside the village in 1983, have migrated out in disproportionate numbers. Further scrutiny reveals that there has been a rise in self-employment and non-farm casual labour; activities that take villagers outside Palanpur on a short-term, often daily, basis. We also find that land ownership is an important determinant of working outside the village and that the structural link between land and employment has not changed over time.