No abstract

Nonfarm activities generate, on average, about 60% of rural households' incomes in the Himalayas. This article analyzes the determinants of participation in nonfarm activities and of nonfarm incomes across rural households. A unique data set collected in the Himalayan region of India allows us to deal with the heterogeneity of rural nonfarm activities by using aggregations into categories that are useful both analytically and for policy purposes. We conduct an empirical inquiry that reveals that education plays a major role in accessing more remunerative nonfarm employment. Other household assets and characteristics such as land, social status, and geographical location also play a role. (c) 2008 by The University of Chicago. All rights reserved..

The potential importance of nonfarm employment for the welfare of rural households has long been recognized, but whether the nonfarm sector offers prospects for improving the welfare of the rural poor remains a contentious issue. We examine distributional and well‐being effects of nonfarm employment of rural households in the Himalayas. We account for heterogeneity of nonfarm employment, and estimate a system of structural equations to better understand the causal linkages between nonfarm employment and household well‐being. The results confirm that disaggregating nonfarm employment activities matters for understanding the relationship between nonfarm employment and rural welfare. While low‐return nonfarm employment is associated with lower income inequality, high‐return nonfarm activities have a disequalizing effect on the distribution of household incomes. We also find that the ability to engage in high‐return nonfarm activities is associated with higher economic well‐being. Poor households, on the other hand, tend to rely on low‐return activities that do not contribute to improved well‐being.

This article examines livelihood diversification strategies of rural households using survey data from the Himalayas. We present and explore an analytical framework that yields different activity choices as optimal solutions to a simple utility maximization problem. By classifying the range of activities of rural households into a few distinct categories based on their profitability and by considering portfolios of farm and nonfarm activities, we provide novel insights into diversification behaviour of rural households. The evidence shows that while the poor are mainly agricultural labourers and work in the low-return non-farm sector, the better-off diversify in high-return nonfarm activities. As expected, we find strong evidence that education plays a major role in accessing more remunerative non-farm employment. A somewhat less intuitive finding is that larger household size is associated with higher probability of diversification into the high-return non-farm sector. The finding that the farm size is not a constraint to diversification in lucrative non-farm employment is also surprising. Geographical location plays a role in diversification behaviour of rural households indicating the importance of local context.

The paper investigates the proposition that complementarities exist between information technologies and public health promotion. The results of the cross-country analysis indicate that an increase in the stock of telecommunications infrastructure is positively correlated with an improved health status of the population. To integrate more realism into the macrolevel analysis, the paper utilizes household surveys conducted in two emerging market economies: Bangladesh and Laos. The analysis at the household level shows that a basic telephone service offers opportunities in delivering timely information on health services to households with relatively greater demand for this type of information. Telephone access is also associated with an increased demand for telecommunications infrastructure and medical facilities. (c) 2005 Massachusetts Institute of Technology.