Thinking Aloud: Volume I, Issue 6

The November 1, 2014 issue of Thinking Aloud focuses on farm and nonfarm sectors in rural Bangladesh. The first article explores the determinants of the switch between farm and nonfarm employment. The article, using a constructed pseudo panel data for the period between 1995 and 2010 and associated econometric method, argues that several factors affect the rise in employment in the rural nonfarm sector relative to the farm sector, and the largest pull effect comes from the rise in education, and the largest push effect stems from the fall in relative farm income. Highlighting agricultural sector’s spillover effects on the rest of the economy, the second article, using time series econometric models, underscores the importance of an agriculture-focused growth strategy in Bangladesh. The article also emphasizes that such a strategy would generate immediate anti-poverty effects while ensuring a huge market for products and services for local industries. Short interviews of a small grocery-shop owner and a van-puller from a rural area of Northern Bangladesh show the underlying dynamics in the rural nonfarm sector. Finally a short article presents a very brief overview of the strategy for rural nonfarm activity in the Sixth Five Year Plan of Bangladesh.