IDEAS home Printed from https://ideas.repec.org/p/unm/unumer/2011011.html
   My bibliography  Save this paper

Microeconomic analysis of rural nonfarm activities in the Kyrgyz Republic: What determines participation and returns?

Author

Listed:
  • Atamanov, Aziz

    (Maastricht Graduate School of Governance, Maastricht University)

  • Van den Berg, Marrit

    (Dept. of Development Economics, Wageningen University)

Abstract

This paper uses two representative household budget surveys from the Kyrgyz Republic to analyze factors influencing participation and returns from different types of nonfarm activities in 2005 and 2006. Nonfarm activities are found to be most important for the poor, who are pushed out of agriculture due to limited and poor land resources. We also show that different nonfarm activities have different human capital requirements. Unlike other studies, we use the double hurdle model which allows us to demonstrate that a number of variables have different effects on participation and income from nonfarm activities. For example, residing in remote areas and lack of capital are found to stimulate participation in nonfarm activities, but decrease nonfarm income. Overall, the empirical analysis confirms the importance of rural nonfarm activities and indicates that equipping poor households to enable them to move towards better remunerative nonfarm activities should be a priority for Kyrgyz rural policy makers.

Suggested Citation

  • Atamanov, Aziz & Van den Berg, Marrit, 2011. "Microeconomic analysis of rural nonfarm activities in the Kyrgyz Republic: What determines participation and returns?," MERIT Working Papers 2011-011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2011011
    as

    Download full text from publisher

    File URL: https://unu-merit.nl/publications/wppdf/2011/wp2011-011.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Escobal, Javier, 2001. "The Determinants of Nonfarm Income Diversification in Rural Peru," World Development, Elsevier, vol. 29(3), pages 497-508, March.
    2. Alberto Isgut, 2004. "Non-farm Income and Employment in Rural Honduras: Assessing the Role of Locational Factors," Journal of Development Studies, Taylor & Francis Journals, vol. 40(3), pages 59-86.
    3. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-1240, September.
    4. Barrett, Christopher B. & Reardon, Thomas, 2000. "Asset, Activity, And Income Diversification Among African Agriculturalists: Some Practical Issues," Working Papers 14734, Cornell University, Department of Applied Economics and Management.
    5. Lay, Jann & M'Mukaria, George Michuki & Omar Mahmoud, Toman, 2007. "Boda-bodas rule: Non-agricultural activities and their inequality implications in Western Kenya," Open Access Publications from Kiel Institute for the World Economy 6543, Kiel Institute for the World Economy (IfW Kiel).
    6. Jonasson, Erik & Helfand, Steven M., 2010. "How Important are Locational Characteristics for Rural Non-agricultural Employment? Lessons from Brazil," World Development, Elsevier, vol. 38(5), pages 727-741, May.
    7. World Bank, 2009. "World Development Indicators 2009," World Bank Publications - Books, The World Bank Group, number 4367.
    8. Davis, Benjamin & Covarrubias, Katia & Stamoulis, Kostas G. & Winters, Paul C. & Carletto, Calogero & Quinones, Esteban & Zezza, Alberto & Di Giuseppe, Stefania, 2007. "Rural Income Generating Activities: A Cross Country Comparison," 106th Seminar, October 25-27, 2007, Montpellier, France 7913, European Association of Agricultural Economists.
    9. Pham, Hung T, 2006. "Rural Nonfarm Employment Under Trade Reform Evidence From Vietnam, 1993-2002," MPRA Paper 6476, University Library of Munich, Germany.
    10. Maurizio Guadagni & Turi Fileccia, 2009. "The Kyrgyz Republic : Farm Mechanization and Agricultural Productivity," World Bank Publications - Reports 19476, The World Bank Group.
    11. Reardon, Thomas & Berdegue, Julio & Escobar, German, 2001. "Rural Nonfarm Employment and Incomes in Latin America: Overview and Policy Implications," World Development, Elsevier, vol. 29(3), pages 395-409, March.
    12. Yunez-Naude, Antonio & Edward Taylor, J., 2001. "The Determinants of Nonfarm Activities and Incomes of Rural Households in Mexico, with Emphasis on Education," World Development, Elsevier, vol. 29(3), pages 561-572, March.
    13. Matshe, Innocent & Young, Trevor, 2004. "Off-farm labour allocation decisions in small-scale rural households in Zimbabwe," Agricultural Economics, Blackwell, vol. 30(3), pages 175-186, May.
    14. World Bank, 2004. "Kyrgyz Republic - Agricultural Policy Update : Sustaining Pro-poor Rural Growth, Rural Challenges for Government and Donors," World Bank Publications - Reports 14518, The World Bank Group.
    15. Abdulai, Awudu & CroleRees, Anna, 2001. "Determinants of income diversification amongst rural households in Southern Mali," Food Policy, Elsevier, vol. 26(4), pages 437-452, August.
    16. Woldenhanna, T. & Oskam, A., 2001. "Income diversification and entry barriers: evidence from the Tigray region of northern Ethiopia," Food Policy, Elsevier, vol. 26(4), pages 351-365, August.
    17. LERMAN, Zvi, 2009. "Land reform, farm structure, and agricultural performance in CIS countries," China Economic Review, Elsevier, vol. 20(2), pages 316-326, June.
    18. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    19. Frank Ellis, 1998. "Household strategies and rural livelihood diversification," Journal of Development Studies, Taylor & Francis Journals, vol. 35(1), pages 1-38.
    20. repec:zbw:ifwkie:4250 is not listed on IDEAS
    21. Lerman, Zvi & Zedik, David, 2009. "Agrarian Reform in Kyrgyzstan: Achievements and the Unfinished Agenda," Discussion Papers 54160, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    22. J. Taylor & Irma Adelman, 2003. "Agricultural Household Models: Genesis, Evolution, and Extensions," Review of Economics of the Household, Springer, vol. 1(1), pages 33-58, January.
    23. repec:pru:wpaper:35 is not listed on IDEAS
    24. Corral, Leonardo & Reardon, Thomas, 2001. "Rural Nonfarm Incomes in Nicaragua," World Development, Elsevier, vol. 29(3), pages 427-442, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Franziska Gassmann, 2011. "Protecting Vulnerable Families in Central Asia: Poverty, vulnerability and the impact of the economic crisis," Papers inwopa639, Innocenti Working Papers.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Atamanov, Aziz & Van den Berg, Marrit, 2012. "Determinants of the rural nonfarm economy in Tajikistan," MERIT Working Papers 2012-080, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Bezu, Sosina & Barrett, Christopher B., 2010. "Activity Choice in Rural Non-farm Employment (RNFE): Survival versus accumulative strategy," MPRA Paper 55034, University Library of Munich, Germany.
    3. Francesca Marchetta, 2008. "Migration and non farm activities as income diversification strategies: the case of Northern Ghana," Working Papers - Economics wp2008_16.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    4. Liu, Zhen & Lan, Jing, 2015. "The Sloping Land Conversion Program in China: Effect on the Livelihood Diversification of Rural Households," World Development, Elsevier, vol. 70(C), pages 147-161.
    5. Adugna, Lemi, 2009. "Determinants of Income Diversification in Rural Ethiopia: evidence From Panel Data," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 18(1), pages 116-116, December.
    6. Kibru, Martha, 2020. "Labor allocation to Non-agricultural Activities in Rural Ethiopia: A Gender Perspective," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 29(01), April.
    7. Benjamin Tetteh Anang, 2017. "Effect of non-farm work on agricultural productivity: Empirical evidence from northern Ghana," WIDER Working Paper Series wp-2017-38, World Institute for Development Economic Research (UNU-WIDER).
    8. Benjamin Tetteh Anang, 2017. "Effect of non-farm work on agricultural productivity: Empirical evidence from northern Ghana," WIDER Working Paper Series 038, World Institute for Development Economic Research (UNU-WIDER).
    9. Dil Bahadur Rahut & Akhter Ali & Menale Kassie & Paswel P. Marenya & Chudamani Basnet, 2014. "Rural Livelihood Diversification Strategies in Nepal," Poverty & Public Policy, John Wiley & Sons, vol. 6(3), pages 259-281, September.
    10. Almeida, Alexandre N. & Bravo-Ureta, Boris E., 2019. "Agricultural productivity, shadow wages and off-farm labor decisions in Nicaragua," Economic Systems, Elsevier, vol. 43(1), pages 99-110.
    11. Bagamba, Fredrick & Burger, Kees & Kuyvenhoven, Arie, 2007. "Determinants of smallholder farmer labour allocation decisions in Uganda," 106th Seminar, October 25-27, 2007, Montpellier, France 7920, European Association of Agricultural Economists.
    12. Nguyen, Huy, 2014. "The effect of land fragmentation on labor allocation and the economic diversity of farm households: The case of Vietnam," MPRA Paper 57521, University Library of Munich, Germany.
    13. Drall, Anviksha & Mandal, Sabuj Kumar, 2021. "Investigating the existence of entry barriers in rural non-farm sector (RNFS) employment in India: A theoretical modelling and an empirical analysis," World Development, Elsevier, vol. 141(C).
    14. Adugna Lemi, "undated". "The Dynamics of Income Diversification in Ethiopia: Evidence from Panel data," Working Papers 3, University of Massachusetts Boston, Economics Department.
    15. Vellema, W. & Buritica Casanova, A. & Gonzalez, C. & D’Haese, M., 2015. "The effect of specialty coffee certification on household livelihood strategies and specialisation," Food Policy, Elsevier, vol. 57(C), pages 13-25.
    16. repec:dgr:rugcds:cds-27 is not listed on IDEAS
    17. Corral, Paul & Radchenko, Natalia, 2017. "What’s So Spatial about Diversification in Nigeria?," World Development, Elsevier, vol. 95(C), pages 231-253.
    18. Anviksha Drall & Sabuj Kumar Mandal, 2020. "Determinants of various modes of rural non-farm sector (RNFS) employment in SAT (semi-arid tropics) and Eastern regions of India: an empirical analysis," Indian Economic Review, Springer, vol. 55(2), pages 253-282, December.
    19. Shaikh M.S.U. Eskander & Edward B. Barbier & Benjamin Gilbert, 2018. "Fishing and Nonfishing Income Decisions: The Role of Human Capital and Family Structure," Land Economics, University of Wisconsin Press, vol. 94(1), pages 114-136.
    20. Helmy, Imane, 2020. "Livelihood Diversification Strategies: Resisting Vulnerability in Egypt," GLO Discussion Paper Series 441, Global Labor Organization (GLO).
    21. Stein Kristiansen, 2007. "Entry Barriers in Rural Business," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 16(1), pages 53-76, March.

    More about this item

    Keywords

    nonfarm activities; rural areas; Kyrgyz Republic; household income; nonfarm income; rural policy; public policy;
    All these keywords.

    JEL classification:

    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unm:unumer:2011011. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ad Notten (email available below). General contact details of provider: https://edirc.repec.org/data/meritnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.