Does Non-Farm Sector Employment Reduce Rural Poverty and Vulnerability? Evidence from Vietnam and India

Katsushi Imai, Raghav Gaiha and Ganesh Thapa
Additional contact information
Raghav Gaiha: Faculty of Management Studies, University of Delhi, India
Ganesh Thapa: International Fund for Agricultural Development, Rome, Italy

No DP2015-01, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: The present study examines whether rural non-farm employment has any poverty and/or vulnerability-reducing effect in Vietnam and India. To take account of sample selection bias associated with it, we have applied treatment-effects model. It is found that log per capita consumption or log mean per capita expenditure significantly increased as a result of access to the rural non-farm employment in both Vietnam and India - which is consistent with its poverty reducing role of accessing - with the aggregate effect larger in Vietnam than in India. Access to the rural non-farm employment significantly reduces vulnerability too in both countries, implying that diversification of household activities into non-farm sector would reduce such risks. When we disaggregate non-farm sector employment by its type, we find that poverty and vulnerability reducing effects are much larger for sales, professionals, and clerks than for unskilled or manual employment in both countries. However, because even unskilled or manual non-farm employment significantly reduces poverty and vulnerability in India and poverty in some years in Vietnam, this has considerable policy significance as the rural poor do not have easy access to skilled non-farm employment.

Keywords: Poverty; Vulnerability; Non-farm sector; Treatment Effects Model; Vietnam; India (search for similar items in EconPapers)
JEL-codes: C21 C31 I32 O15 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2015-01
New Economics Papers: this item is included in nep-agr, nep-dev and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (56)

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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2015-01.pdf First version, 2015 (application/pdf)

Related works:
Journal Article: Does non-farm sector employment reduce rural poverty and vulnerability? Evidence from Vietnam and India (2015)
Working Paper: Does Non-farm Sector Employment reduce Rural Poverty and Vulnerability? Evidence from Vietnam and India (2012)
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