Rural Income and Employment Diversity in India during 1994 and 2005

‘Rural Income and Employment Diversity in India during 1994 and 2005’, Journal of Developing Societies, 25(2): June 2009.

Summary: – This paper assesses the structure of rural income and employment according to source in India. It probes the size and role of ‘rural nonfarm employment’ in poverty alleviation. Data from two nationally representative rural sample surveys (33230 and 27010 households respectively) with reference years 1993-4 and 2004-5 are subjected to multinomial logit and CLAD regressions to explore importance of diversity of income sources across states and regions. These are rare data on direct household income estimates in the multi-model survey context having advantage of many household and village level determinants suitable for advanced analysis. Evidence suggests considerable income diversification over the reference decade, but distribution of shares suggests that top most quintile draw almost all of the benefits of recent economic growth in India. The economic linkage between the RNFE and rural wage rates has reduced and almost not existent during the later reference year in analysis.


Key Words: rural nonfarm employment (RNFE), Labor shares, changeover 1993-4 and 2004-5, income productivity, wage determination, Rural India