BY BHARAT YOUNGYANG, Thimphu

A Bhutanese Assistant Professor of Economics at the South Asian University in New Delhi Dr (PHD).Dil Bahadur Rahut and Dr.Maja Micevska Scharf from the University of Leiden, who  jointly brought out the research paper “Nonfarm Employment and Rural Welfare: Evidence from the Himalayas”, won the GREThA Development CONFERENCE 2012 prize. Organized by the University of Bordeaux, France, it topped the rung from among 200 research papers.

According to Dr. Dil Bahadur, the paper delves into the potential importance of nonfarm employment for the welfare of poor rural households. Though this has long been recognized, its affect to improve wellbeing of the rural poor “still remains a contentious issue.”

The paper examines distributional and wellbeing effects of nonfarm employment of rural households in the Himalayas and accounts for heterogeneity of nonfarm employment.

Another important aspect covered by the paper is its specification and estimation on a simultaneous framework of determinants and consequences of nonfarm employment.

The findings show that the effect of nonfarm employment on rural welfare depends on which type of nonfarm activity households are involved in.

While low-return nonfarm employment is associated with lower income inequality, high-return nonfarm activities have a “disequalizing effect on the distribution of household incomes.”

“We also find that ability to engage in high-return nonfarm activities is associated with higher economic wellbeing. Poor households, on the other hand, are unable to enter the high-return nonfarm sector and rely on low-return activities, which do not contribute to improved wellbeing and can lock them into the poverty trap,” Dr. Dil said.

Dr.Dil Bahadur Rahut and  Dr.Maja Micevska Scharf has together contributed several paper on rural labour market  in peer reviewed international journal.