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Do Non-farm Enterprises Offer Pathways for Upward Mobility in Rural Pakistan? Evidence from Panel Dataset

Author

Listed:
  • Shujaat Farooq

    (Benazir Income Support Programme (BISP), Islamabad.)

  • Zunaira Younais

    (Research Fellow, Pakistan Institute of Development Economics, Islamabad.)

Abstract

This study has analysed the dynamics of rural non-farm enterprises and their role in employment provision, equity enhancement and poverty alleviation in Pakistan. Multiple data sources have been used including cross-sectional and panel datasets. The results show that majority of the rural non-farm enterprises in Pakistan are micro-enterprises with only a limited share in manufacturing. They are informal and have poor forward and backward linkages and high closure rate. Despite the poor asset base, they are providing jobs to more than half of the rural population, contributing to reduction in poverty and equity enhancement among the rural masses. Rich households own enterprises and poor households gain employment from non-farm enterprises. Non-farm economy has a significant impact in reducing multiple deprivations and also has a significant positive impact in pulling households out of poverty with the passage of time. Pakistan, being a country where most of the population is still residing in rural areas and where rural land is not equitably distributed; such non-farm activities are highly important not only to tackle the ongoing food security challenges but also for resource diversification of households.

Suggested Citation

  • Shujaat Farooq & Zunaira Younais, 2018. "Do Non-farm Enterprises Offer Pathways for Upward Mobility in Rural Pakistan? Evidence from Panel Dataset," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 57(2), pages 203-221.
    • Handle: RePEc:pid:journl:v:57:y:2018:i:2:p:203-221
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    References listed on IDEAS

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    2. Koomson, Isaac & Orkoh, Emmanuel & Ahmad, Shabbir, 2023. "Non-farm entrepreneurship, caste, and energy poverty in rural India," Energy Economics, Elsevier, vol. 127(PA).

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    More about this item

    Keywords

    Rural Development; Non-farm Sector; Employment; Poverty; Multidimensional Poverty;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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