Does Nonfarm Enterprise offer Pathways for Upward Mobility in Pakistan? Evidences from Panel Dataset
Author: Zunaira Yunus

Rural non-farm economy has mostly been remained unobserved; however, now it is gaining attention due to rising risks of poverty and vulnerability. This dissertation has three specific objectives, a) analysis of dynamics and structure of rural non-farm economy, b) evaluation of the profile of rural enterprise and c) analyze the impact of non-farm enterprise on a wide range of household welfare indicators. The study has used various data resources including Pakistan Labor Force Survey, Pakistan Social and Living Standards Measurement Survey (PSLM)-2010 and 2012 and two waves of Pakistan Panel Household Survey (PPHS) which are 2001 and 2010. The Regression model has been applied to estimate the determinants of value addition while the logistic and multinomial logistic regression is utilized to estimate the impact of rural non-farm enterprise on poverty and dynamics of poverty. The findings reveal that 20 per cent of the rural Pakistani households own some sorts of non-farm enterprise. Most of the enterprise are informal and they have poor asset endowments. Households own more enterprise in those districts that have good physical and human infrastructure. The PPHS panel survey reveals that rural non-farm enterprise declined during 2001 and 2010 period with a decline of around 45 per centage points.Women participation as the manager is quite low but is improving overtime. More than half of the rural non-farm enterprise are located in homes. Asset and sale base is small but it improved during 2001-10 period. Presently this sector is providing jobs to around 58 per cent of the rural population. The micro level determinants of value addition suggests that both the labor and capital has the positive impact to improve sales of the firms. Similarly education of manager also lead to improve sales of rural enterprise. Huge regional variation can be found with more concentration of enterprise in North and Central Punjab. The dynamics analysis reveal that 74 per cent of the rural households not own non-farm enterprise in both the rounds while 5 per cent of the households own in both the rounds. Households headed by male have more ownership in both the rounds. Education of head of household has also a positive impact on the survival of these enterprise. Ownership of livestock does not make any difference, however, access to land is negatively associated with ownership. The richest households own more enterprise while the poorer households are reliant for employment to these enterprise. Non-farm enterprise have a positive association with household welfare, as these households are facing less issues of headcount poverty, multidimensional poverty and have more per capita consumption expenditures and their children are more enrolled in school compared to their counterparts who does not own enterprise. Supervisor:- Dr. Shujaat Farooq

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Keywords : Nonfarm Enterprise, Pakistan, Panel Dataset, Upward Mobility
Supervisor: Shujaat Farooq

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