Determinants of Non-farm Activities in Punjab, Andhra Pradesh and Tamil Nadu

Abstract

The rural areas are changed over the last two decades, with share of agriculture in household incomes drastically reduced with simultaneous

increase in non-farm incomes. However, the employment growth in nonfarm sector is sluggish and varies across the states. Keeping the importance

of non-farm sector in the most developed states like Punjab, Andhra Pradesh and Tamil Nadu, the paper explores the evolution of non-farm

sector with the following specific objectives: (1) To study the relationship between nonfarm employment and different socio-economic structural

variables at district level, (2) To study the importance of education in rural nonfarm activity. The null-hypothesis behind the study is there is

no significance relationship between non-farm employment and literacy, social status and other infrastructure variables at district level. In advanced

states like AP, Punjab and TN, the growth of non-farm sector is much higher compared to other states. Using the district level data, we analyse

the determinants of share of non-farm employment in Andhra Pradesh, Punjab, and Tamil Nadu.