Humboldt-Universität zu Berlin - Quarterly Journal of International Agriculture

Quarterly Journal of International Agriculture No. 1/05

Theoretical concepts for the analysis of non-farm rural employment

Judith Möllers and Gertrud Buchenrieder
University of Hohenheim, Stuttgart, Germany


Employment diversification is one of the major livelihood strategies in rural areas. This paper addresses theoretical concepts for the analysis of non-farm rural employment (NFRE). The sustainable livelihood framework depicts the context in which diversification strategies evolve. The demand-pull/distress-push concept complements this framework by offering a set of motives, which prompt households to diversify. The driving forces of demand-pull and distress-push processes are approached by two models. First, a welfare model is used to explain the labor allocation processes induced by wage and income incentives. It shows that benefits do not only arise for demand-pull shifters, who take up better paid non-farm employment. Benefits occur also for distress-push shifters, whose incentive to engage in low-paid non-farm activities is to raise aggregate household income. For the design and the analysis of empirical research we suggest to not only consider the welfare model, but also a model borrowed from behavioral science, along with the sustainable livelihood framework, and the demand-pull/distress-push concept. The complexity of non-farm sector dynamics is calling for a clarification and extension of the theoretical concepts presently available. This paper summarizes existing theories and introduces some new aspects in regard to modeling NFRE and diversification. It is meant to serve as a basis for empirical research as well as a thought-provoking impulse for policy makers, particularly in regard to the importance that is given to non-farm diversification in the ongoing rural development debate.

Keywords: non-farm employment, livelihood, push-pull, theoretical concepts

Vol. 44 (2005), No. 1: 19-36