Vol. 11, Special Issue 4 (2022)

Author(s):
A Daniel Viswasam Samuel

Abstract:
The present study has been undertaken in four blocks from the two districts namely Madurai and Erode of Tamil Nadu to analyze the structural changes in rural employment, factors for the diversification to non-farm employment, income inequality and standard of living among rural households and to suggest the policies for changes in rural employment. The significance of the study for the selected factor variables was analyzed through econometric models such as Chow Test, Logit Model, Dummy Variable Model and Standard of Living Function with the tests of significance. Further Gini Coefficient and Garrett Ranking techniques were used to cover the objectives of the study. The significance of F value of Chow Test indicated there are shifts in rural occupation amidst farmer and labor households. Proximity to city and the age of the respondents significantly influence for the shifts. The most important factor influenced the non-farm households were; there is no continuous income from agriculture (89.10 per cent). There is skewness (Gini ratio = 0.258) in the distribution of income among households of farm and the households shifted to non-farm. A close examination of dummy variable model incorporating income variable of the respondents disclosed, gross income of farm households are significantly higher than even the non-farm households with an average increase of 35 per cent. However, there is a sharp rise of (74 per cent) non-farm income than the net income of farm income. Hence, it explicitly shows the input costs are much higher and the return to inputs is in much lower phase. The rural households also pointed out one of the important reason for shifting over to non-agricultural sector is expensive input cost (higher Garrett score). The coefficient of the variable after non-farm consumption expenditure in the farm household was positive and significant at five per cent level with a value of 0.035, indicating that with every increase at the consumption expenditure from non-farm sources would increase the standard of living of household significantly. Dependency ratio positively significant at one per cent level with a value of 34.034, indicating that increase at the proportion of earners to the size of household from the existing mean level would significantly increase the standard of living of farm households. Measures to invest more public and private investment on rural and cottage industries and artisan works and also initiating rural based non-farm government employment programmes are needed to reduce the competition for employment opportunities for the rural households.