| dc.description.abstract | Development researchers and policymakers in developing countries, particularly in
Rwanda, are increasingly emphasizing the role of rural nonfarm (RNF) sector
development in resolving the meso-paradox, defined as the failure of development
policies to spur development at the meso-level. Despite Rwandan Government's efforts
to stimulate growth of the RNF sector in order to improve the lot of farming
communities, recent studies have found that participation in this sector remains low
compared to other developing and transition countries. Although they argued that this
low participation rate could be attributed to the 1994 civil war, questions remains as to
whether other factors are constraining its expansion.
This study intends to fill this knowledge gap by primarily analyzing micro-level factors
driving participation in RNF labor market. It focuses on Gisagara District of the Southern
Province for its agroclimatic and demographic characteristics which are representative of
the other regions of the country. The study uses the labor supply theory to investigate the
role of three categories of micro-level factors on household's participation in RNF
employment namely, household-specific factors, farm-specific factors, and institutional
factors. Economic and demographic factors are included as conditioning factors in the
empirical model. It uses Cragg's Double Hurdle model to test the effect of these factors
on farm household's decision to participate in RNF employment and the intensity of
participation, once the participation decision is made. The data was generated through
personal interviews of 241 farm households drawn using multistage stratified random
sampling technique, where respondents are stratified by area's potentiality In RNF
employments.
The empirical analysis leads to several interesting results. As hypothesized, the study
reveals that household-specific factors influence the decision to engage in RNF activities.
Notably, we find that households headed by women and those having more adults and
educated workers are more likely to participate in RNF employment. Further, we find
that households with young and educated members tend to allocate more work hours in
the RNF activities. This study reveals also that farm-specific factors such as landholding
and farm incomes have significant effects on the probability to take up nonfarm activities.
On institutional factors, the results suggest that the extent of participation in local
community organizations (e.g., groups and associations) increases the probability of
participation in RNF employment.
These findings imply that policies aimed at promoting rural development through RNF
sector needs to consider the human, physical and social capital endowments of the
communities that are targeted. The government should direct more attention on the
promotion of education to provide skills needed by RNF labor markets, and social
networking among rural farming communities. The latter result supports the ongoing
effort by the government to implement social networks through agglomeration settlement
schemes popularly known as umudugudu program. | en |
