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Rural nonfarm employment : a survey


  • Lanjouw, Jean O.
  • Lanjouw, Peter


So little is known about the rural nonfarm sector that those making policy to assist rural small-scale enterprises have done so largely"unencumbered by evidence". The Lanjouw survey of nonfarm data and policy experience attempts to correct this. Until recently, the commonly held view was that rural nonfarm employment was relatively nonproductive, producing goods and services of low quality. The rural off-farm sector was expected to wither away with development and rising incomes, and this was viewed as a positive, rather than a negative, event. A corrollary of this view was that the government need not actively worry about the sector -- or be concerned about how policies elsewhere might harm it. More recently, opinion has swung the other way, and it is increasingly argued that neglect of the sector would be mistaken. The survey highlights the positive roles that the rural nonfarm sector can play in promoting both growth and welfare. In the widespread situation of a rural workforce growing faster than the employment potential in agriculture, the nonfarm rural sector can lower unemployment and slow rural-urban migration. It is particularly useful in employing women and providing off-season incomes. The technologies used in small-scale rural manufacturing may be more appropriate and thus generate greater income from available productive inputs. What role could government play in promoting the nonfarm sector? The emphasis of government policy has been on large-scale urban industry as the main engine of growth. More recently, there has been a move toward a more"broad-based growth"approach, with greater emphasis on the development of agriculture and the rural economy. Increasingly countries have targeted project assistance schemes, for example to provide training, infrastructure, and technology to support small-scale and rural enterprises. Nonetheless, in most countries it remains true that projects to support the nonfarm rural sector are undertaken in a policy environment which is biased against this sector.

Suggested Citation

  • Lanjouw, Jean O. & Lanjouw, Peter, 1995. "Rural nonfarm employment : a survey," Policy Research Working Paper Series 1463, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1463

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    References listed on IDEAS

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    6. Dethier, Jean-Jacques & Effenberger, Alexandra, 2012. "Agriculture and development: A brief review of the literature," Economic Systems, Elsevier, vol. 36(2), pages 175-205.
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    9. Lopez, Ramon & Galinato, Gregmar I., 2007. "Should governments stop subsidies to private goods? Evidence from rural Latin America," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1071-1094, June.
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    12. G. M. Arif & Hina Nazli & Rashida Haq, 2000. "Rural Non-agriculture Employment and Poverty in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 39(4), pages 1089-1110.
    13. Lanjouw, Peter, 1998. "Ecuador's rural nonfarm sector as a route out of poverty," Policy Research Working Paper Series 1904, The World Bank.
    14. Ranjan, Sharad, 2006. "Occupational Diversification And Access To Rural Employment: Revisiting The Non Farm Employment Debate," MPRA Paper 7870, University Library of Munich, Germany.
    15. Kimura, Yuichi, 2011. "Knowledge Diffusion and Modernization of Rural Industrial Clusters: A Paper-manufacturing Village in Northern Vietnam," World Development, Elsevier, vol. 39(12), pages 2105-2118.
    16. Nguyen Viet Cuong, 2009. "Measuring the impact of cash crops on household expenditure and poverty in rural Viet Nam," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 16(2), pages 87-112, December.
    17. Newman, Constance & Canagarajah, Sudharshan, 2000. "Gender, poverty, and nonfarm employment in Ghana and Uganda," Policy Research Working Paper Series 2367, The World Bank.
    18. Pham, Hung T, 2006. "Rural Nonfarm Employment Under Trade Reform Evidence From Vietnam, 1993-2002," MPRA Paper 6476, University Library of Munich, Germany.
    19. Adugna Lemi, "undated". "The Dynamics of Income Diversification in Ethiopia: Evidence from Panel data," Working Papers 3, University of Massachusetts Boston, Economics Department.
    20. Anne Booth, 2002. "The Changing Role Of Non-Farm Activities In Agricultural Households In Indonesia: Some Insights From The Agricultural Censuses," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 38(2), pages 179-200.
    21. Mundlack, Yair & Larson, Donald F. & Butzer, Rita, 2002. "Determinants of agricultural growth in Indonesia, the Philippines, and Thailand," Policy Research Working Paper Series 2803, The World Bank.
    22. Islam, Nurul, 1997. "The nonfarm sector and rural development: review of issues and evidence," 2020 vision discussion papers 22, International Food Policy Research Institute (IFPRI).
    23. Chakrabarti, Saumya & Kundu, Anirban & Nandi, Alok Kumar, 2011. "Farm–Non-Farm Linkage in India: A Structuralist Perspective," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 66(2).


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