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Drivers of Rural Non-farm Sector Employment in India, 1983–2019

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Listed:
  • Shiba Shankar Pattayat
  • Jajati Keshari Parida

Abstract

Using the national-level employment and unemployment surveys (NSS and PLFS) and the macro-level data for the period 2005–2019, this article explores the trends and recent growth patterns of rural non-farm sector employment in India. It also examines the micro-level factors determining individuals’ preference towards non-farm sector jobs and the macro-level factors responsible for the growth of non-farm sector employment in rural India. The main findings of the study suggest that although rural non-farm sector employment is rising in absolute terms, its growth rate has slackened in recent years. While the level of education and skill training, market wage rates and socio-cultural setups are among the key micro-level factors determining farm–non-farm employment choices of rural folks, at the macro-level, the growth of investment in capital goods, the number of factories, investment in infrastructure development and the growth of the manufacturing sector are crucial for the growth of non-farm sector jobs in India. Based on these findings, it is argued that the improvement of human capabilities through increased investment in education and skill, and the growth of non-farm sector employment through the development of rural infrastructure and industrialization measures, are necessary to sustain the structural transformation and to harness the demographic dividend in India. JEL Codes: J01, J21, J43, J64

Suggested Citation

  • Shiba Shankar Pattayat & Jajati Keshari Parida, 2024. "Drivers of Rural Non-farm Sector Employment in India, 1983–2019," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 25(1), pages 45-73, March.
    • Handle: RePEc:sae:soueco:v:25:y:2024:i:1:p:45-73
    DOI: 10.1177/13915614231221649
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    More about this item

    Keywords

    Job analysis; youth work; India; urban; rural and regional economics;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • 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
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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