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Microeconomic analysis of rural nonfarm activities in the Kyrgyz Republic: What determines participation and returns?

  • Atamanov, Aziz

    ()

    (Maastricht Graduate School of Governance, Maastricht University)

  • Van den Berg, Marrit

    ()

    (Dept. of Development Economics, Wageningen University)

This paper uses two representative household budget surveys from the Kyrgyz Republic to analyze factors influencing participation and returns from different types of nonfarm activities in 2005 and 2006. Nonfarm activities are found to be most important for the poor, who are pushed out of agriculture due to limited and poor land resources. We also show that different nonfarm activities have different human capital requirements. Unlike other studies, we use the double hurdle model which allows us to demonstrate that a number of variables have different effects on participation and income from nonfarm activities. For example, residing in remote areas and lack of capital are found to stimulate participation in nonfarm activities, but decrease nonfarm income. Overall, the empirical analysis confirms the importance of rural nonfarm activities and indicates that equipping poor households to enable them to move towards better remunerative nonfarm activities should be a priority for Kyrgyz rural policy makers.

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File URL: http://www.merit.unu.edu/publications/wppdf/2011/wp2011-011.pdf
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Paper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 011.

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Date of creation: 2011
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Handle: RePEc:unm:unumer:2011011
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  15. World Bank, 2009. "World Development Indicators 2009," World Bank Publications, The World Bank, number 4367, October.
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