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Off-the-farm livelihood choice of farm households in India

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  • Varun Kumar Das

    (Indira Gandhi Institute of Development Research)

  • A. Ganesh-Kumar

    (Indira Gandhi Institute of Development Research)

Abstract

The process of structural transformation in India presents some unique features not seen in the developed countries, viz., seasonal migration from rural to rural areas within the country for employment within the agricultural sector, and the phenomenon of in situ occupational diversification into off-farm activities by farm households in the country. This paper analyzes the determinants of such off-farm livelihood diversification by farm households. The paper argues this process is driven by various household and farm level push factors as well as structural pull factors that are beyond the farmer's control. To test this hypothesis, the paper estimates a multinomial probit model that distinguishes five categories of off-farm activities, viz., wage labor (farm sector), wage labor (non-farm sector), non-farm entrepreneurship, both wage labor (farm) and non-farm entrepreneurship, and both wage labor (non-farm) and non-farm entrepreneurship. Results show that apart from farm and household conditions, structural features such as the village neighborhood, infrastructure agro-climatic conditions, urbanization, and size of the state economy impact household decision on non-farm diversification.

Suggested Citation

  • Varun Kumar Das & A. Ganesh-Kumar, 2019. "Off-the-farm livelihood choice of farm households in India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2019-032, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2019-032
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    More about this item

    Keywords

    Structural transformation; non-farm diversification; off-farm choice; wage labor; entrepreneurship; external conditions;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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