Rural nonfarm employment and incomes in Chile

This article analyzes the evolution of rural nonfarm employment (RNFE) and income in Chile during 1990-96. The data used come from the National Socioe conomic Survey (CASEN), and from a household survey undertaken by the autho rs in two municipalities in 1999. The latter contrasted two zones, very dif ferent in terms of economic dynamism and rural poverty. We show that during the period, RNFE and incomes increased 10% and 18%, respectively, in 1996, reaching 39% of rural employment and 41%; of rural incomes. The rate of mu ltiactivity (the share of households participating in more than one sector) was only 20%, lower than expected, indicating a tendency toward economic s pecialization in rural income strategies. The determinants of such employme nt are mainly household characteristics, in particular variables related to human capital, such as tile age and gender of the household head, and the schooling of the household members, although also important are access to c redit and physical capital. The level of nonfarm income of rural households is determined mainly by the economic context, in particular the economic l evel and dynamism of the overall zone and the quality of the roads. It is p roposed that policies to develop RNFE should be feared to zone characterist ics, and should in general favor investments in education, in roads, and in access to credit. Moreover, households headed by women should be the objec t of special attention. To promote such policies, it will be necessary to a ddress important gaps and weaknesses in the public institutional structure. (C) 2001 Elsevier Science Ltd. All rights reserved.