JBS Vol 11. Num 2. 2009 - Determinants of Non-farm Employment in Rural Bangladesh: A Case of Advanced Villages

Given the critical importance of non-farm sector (NFS) on rural stability, we followed the broader definition of the
sector and aimed at understanding the participation behaviors of household members/workers in non-farm
employment (NFE). We conducted a field survey of 214 randomly selected households` members/workers from four
villages in a relatively advanced rural location- Comilla Sadar Upazila (Sub-district) for the year 2005-06. In the
context of the rural/farm household economic model, we used a version of double hurdle econometric methods
(Probit and Censored Tobit regressions) to analyze determinants of participation and intensity of participation (e.g.
hours worked) respectively. The empirical analyses were done for overall NFE first, and sector-wise NFE later.
Overall, the empirical analyses confirm the importance of gender and education as individual characteristics, and
remittance earners as a household characteristic, for remittance employment. Results also suggest that access to
credit, access to organizations, and remittance earners as household characteristics, with growth centers and
institutions as community characteristics are important for local employment. However, their effects are
qualitatively and quantitatively different in terms of participation and intensity of participation in both overall and
sector-wise NFE. Based on our findings, the higher dependency on out-country remittance and local low-return NFE
could be a threat for sustainability of local livelihoods in advanced rural areas. In addition, the lower participation of
females, especially educated females, in NFE could represent a loss of human capital. Thus, promotion of local
high-return and remittance employment targeted at the poor households and the increase of female participation in
NFE deserve special attention.