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Self-Employment and Its Influence on the Vulnerability to Poverty of Households in Rural Vietnam-A Panel Data Analysis
Abstract
The following paper analyses whether becoming self-employed can help to reduce the vulnerability to poverty of rural households. We use data collected during four survey waves in three rural provinces in Vietnam to calculate region-specific logistic panel regressions. The results show that becoming self-employed increases the likelihood of poor households escaping poverty, but only if they are located in a regional economic environment characterized by an advanced stage of structural change, good infrastructural conditions, and proximity to markets. In less well-developed regions, becoming self-employed is not sufficient to increase the probability of poor households escaping poverty. What matters more is that self-employment is driven by opportunity and not by necessity. However, even opportunity-driven self-employment does not guarantee a reduction of vulnerability to poverty in all regional settings and for all household types. Especially, regional overspecialization in cash-crop production and inequality in access to assets have to be taken into account. In times of declining commodity prices, self-employment entails a risk of business failure in regions that are overspecialized in cash-crop production. For households whose initial investment is high and whose endowment with social and educational assets is low, this can result in increased vulnerability to poverty.
... The second method is the analysis of factors influencing vulnerability. Sohns et al. found that the poverty vulnerability of farm households with bank credit was 0.4% lower than the poverty vulnerability among those without bank credit after studying the correlation between credit access and poverty vulnerability [31]. Han et al. studied the impact of inclusive financial policies on farm poverty vulnerability in China and found that the spread of inclusive financial policies could significantly reduce farm poverty vulnerability [32]. ...
... On the one hand, households engaged in non-farm activities have more diversified sources of income and a richer supply of various types of livelihood capital, making such households more resilient to poverty risk shocks; on the other hand, as agricultural production is constrained by natural resources and the market for agricultural products, such households are more likely to be vulnerable to poverty [18]. On the other hand, agricultural production is subject to both natural resource constraints and agricultural markets, which makes agriculture riskier and farm income relatively more volatile [31,33]. Farmers in non-farm employment, on the other hand, are less vulnerable to poverty because they only partially bear the risks of agricultural production (or bear none at all). ...
... However, the health status of the household head has a significant negative effect on the poverty vulnerability of farming households [23,29], likely because the health status of the household head, as the key labor force of the household, has a greater impact on the ability of the whole household to generate income, thus leading to differences in poverty vulnerability. In terms of human capital, the larger the household size and the higher the population burden coefficient are, the more likely the household is to fall into poverty [30,31]. There are two possible reasons for this result. ...
Rural family differentiation is an important perspective to analyze farmers' behavior and poverty. Based on the data of 1673 farm households from rural field survey in 2019 in Hubei Province of China, this paper examines the main influencing factors of farm household differentiation on farm household poverty vulnerability from the perspective of the sustainable livelihoods of farm households. On this basis, the contribution of each influencing factor to farm household poverty vulnerability is analysed using the regression decomposition method. The results of the study show that the variables of farm household differentiation have a significant impact on poverty vulnerability , and the net household income per capita, which reflect the vertical differentiation of farm households, and the proportion of non-farm labor, which reflects the horizontal differentiation of farm households. Both have a significant negative impact on the poverty vulnerability of farm households. The regression decomposition method shows that the proportion of non-farm labor force, which reflects the horizontal differentiation of farm households, has the highest contribution to the poverty vulnerability of farm households. Human capital, natural capital, social capital, and physical capital also influence the poverty vulnerability of farm households to a certain extent.
... For self-employed vulnerable laborers, Danson et al. (2021) have stated that people are more likely to become self-employed when they do not have a job. Although they have low income, self-employed individuals still receive income, increasing the possibility of getting out of poverty (Nursini, 2020;Sohns & Revilla Diez, 2017). Moreover, there is an ownership shift for the self-employed as women and minors are more likely to report being self-employed (Zhang et al., 2018). ...
... The result shows that an increase in the number of vulnerable off-farm laborers reduces the poverty rate in districts/cities in Sumatra. This is consistent with studies by Duong et al. (2020), Miles et al. (2020), Nursini (2020), and Sohns and Revilla Diez (2017). In this study, vulnerable off-farm laborers consist of off-farm casual and self-employed laborers. ...
This article examines the effect of unemployment, laborer education, type of employment, gender, off‐farm worker vulnerability, investment, and industrialization levels on poverty in districts/cities in Sumatra, Indonesia. The study was conducted in 154 districts/cities in Sumatra from 2013 to 2018. Using a panel data regression model, this study found that laborer education, type of employment, gender, and industrialization level positively affected the poverty rate. By comparison, relatively higher levels of worker vulnerability and investment negatively influenced poverty. Unemployment rates did not influence poverty significantly. The policy recommendation for poverty alleviation, therefore, is the creation of jobs in sectors outside of agriculture, especially in the processing industry and service sectors, coupled with improving the quality of workers' performance through skill training. The study contributes to the literature on poverty reduction by providing insight into how labor factors, investment, and industrialization influence poverty.
... It covers conventional indicators of economic/income inequality, such as gross output and productivity in China (He and others 2017), but also examines dimensions such as transportation networks (Liu and others 2017) and energy trade (Yang and others 2017) in Southeast Asia. Papers in this special issue study the nature of the interrelationship between poverty and inequality in Vietnam (Sohns and Diez 2017) and India (Yenneti and others 2017), and scale down the research by studying firm dynamics in China (He and others 2017) and competitiveness in Georgia (Rodriguez-Pose and Hardy 2017), although some Georgians do not consider themselves to be Asian. The special issue also moves beyond the orthodox inequality studies focusing on output to studying network inequality and its role in spatial inequality (Yang and others 2017;Liu and others 2017). ...
... Local conditions, such as agglomeration externalities, human capital endowments, and local expenditures, determine the competitiveness of Georgian firms (Rodriguez-Pose and Hardy 2017). Self-employment activities can help to diminish regional inequality by reducing the vulnerability to poverty of rural households (Sohns and Diez 2017). Transportation is also considered an important factor in reducing geographical barriers and promoting regional integration, but transportation networks are hierarchical and unevenly distributed (Liu and others 2017). ...
Inequality has recently become a hotly debated topic, and spatial inequality in Asia is critical to equitable development in the world. This article reviews the research on spatial inequality in Asia. It finds that research on inequality has explored the complex economic-geographical processes and multiple trajectories of development in Asia. While studies of inequality have concentrated on the phenomena of divergence and convergence, geographers have made significant contribution by exploring the spatiality/multiscalarity, multimechanism, and multiple dimensions of spatial inequality, especially in the study of spatial inequality in China.
... Similarly, people with entrepreneurship/business skills are more likely to borrow from MFI/SHG for the investment. However, there is risk involved in the investment in small business, without having any other financial support there is more probability of indebtedness leading to poverty and vulnerability (Sohns and Diez, 2017;Bushe, 2019;Moradi et al., 2020). Thus, there is a positive 9 Treatment and control groups are balanced in each period. ...
This study bridges a critical gap by examining the impact of access to microcredit loan on the poverty and vulnerability level of households in multidimensional framework. Using longitudinal data from 2016 to 2019, we find a significant reduction in multidimensional poverty as well as the probability of future poverty of the households. After correcting for the sample selection bias, the impact of microcredit on both poverty and vulnerability is amplified. Further, we find that microcredit loan for productive purposes prevents the household from falling into multidimensional poverty in the future whereas the loan for nonproductive purposes reduces both current and future poverty. The households who first time take loans experience a significant reduction in current as well as future deprivations compared to nonborrowers.
... Empirical evidence suggests that incorporating household-based economic diversification into rural development policies is crucial in settlements with limited economic opportunities (Gautam and Andersen 2016;del Olmo-Garc ıa et al 2023). Such policies contribute to income growth, poverty alleviation, and a reduction in rural-urban migration (Sohns and Revilla Diez 2017), with a focus on accelerating entrepreneurship and self-employment (Robinson et al 2004). In mountain areas, promoting small-scale entrepreneurship is essential for economic diversification, resilience, and sustainable development (Nicula et al 2023). ...
In recent years, Georgia has witnessed a shift in its general policy orientation
from agricultural to rural development, resulting in a transformation of household-based economic activities. Mountain areas have emerged as key focal points for promoting innovative approaches and practices for various reasons, such as lacking
access to markets, out-migration, climate change, and generally difficult contexts for small-scale entrepreneurship. Many households in remote areas have limited access to the necessary resources, making it difficult to take advantage of new opportunities and benefits. This research focuses on pioneer entrepreneurial
households in Khulo municipality in the Lesser Caucasus. The study’s qualitative methodological approach allows a thorough examination of the topic, based on in-depth interviews in 2022 and 2023. We examine adaptation processes and the different forms of capital necessary to start a new business in the mountain environment, as well as motivations for starting a new business and challenges to maintaining economic activities.
... Most closely related to this How vulnerable are the self-employed? 1393 paper, Sohns and Revilla Diez (2017) study to what extent taking up self-employment decreases vulnerability to poverty using panel data from Vietnam. They conclude that self-employment can significantly increase the probability of exiting poverty in economically developing regions, but can also exacerbate poverty risks in regions that are overly reliant on cash crop production. ...
... For example, Celidoni M [4] used micro data to decompose and measure the vulnerability of individuals to poverty. Sohns F [5] used survey data to empirically study the impact of entrepreneurship on family poverty vulnerability. Jinguang Guo used survey data to measure and analysed the vulnerability and poverty dynamics of poor people in China [6]. ...
Objective
From the perspective of informal social support, this paper analysed the impact of factors such as “Relationship with spouse”, “Relationship with Children”, “Financial support from children”, “Sibling support”, “Support from other friends and relatives” and “Borrowing costs” on the health poverty vulnerability of elderly people in rural China.
Methods
Based on the data of the China Health and Retirement Longitudinal Study (CHARLS) in 2018, the vulnerability of the rural elderly to health poverty was measured from two dimensions of health status and influencing factors of health status by the three-stage feasible generalized least square method. A quantile regression model was used to analyse the impact of six variables in the informal social support network on health poverty vulnerability: “Relationship with spouse”, “Relationship with children”, “Financial support from children”, " Sibling support”, " Support from other friends and relatives”, and “Borrowing costs”.
Results
When the poverty line standards were 2995 CNY/year and 4589 CNY/year, the health poverty vulnerability of the elderly population in rural China was 0.397 and 0.598 in 2018. In the analysis of informal social support, factors such as the relationship with spouse, relationship with children, borrowing costs, support from other friends and relatives, and sibling support had different impacts on the health poverty vulnerability of the rural elderly, who were classified into three groups according to their different vulnerabilities.
Conclusion
According to the analysis of the 2018 CHARLS database, the health poverty vulnerability of the elderly population was related to the informal social support network, and it is necessary to pay attention to the role of informal channels such as children, spouses, relatives and friends in daily care and financial support for rural elderly individuals. Meanwhile, the government and other formal organizations should also give full play to their supporting role for elderly individuals, who are highly vulnerable to health poverty, and their families.
... Although a growing body of research sheds light on SE'd workers in terms of their health and well-being, social mobility, and racial and gender discrimination [1,31,[40][41][42][43]], very few research or policy reports consider SE'd workers in terms of their social security and supports [2,5,44]. Moreover, with some exceptions [45], a focus on work disability of SE'd workers in legislation (e.g., labour laws), policy (e.g., workers 'compensation), and academic research has been largely ignored. ...
Self-employment (SE) is a growing precarious work arrangement internationally. In the current digital age, SE appears in configurations and contours that differ from the labor market of 50 years ago and is part of a ‘paradigm shift’ from manufacturing/managerial capitalism to entrepreneurial capitalism. Our purpose in this paper is to reflect on how a growing working population of self-employed people accesses social support systems when they are not working due to injury and sickness in the two comparable countries of Canada and Australia. We adopted ‘interpretive policy analysis’ as a methodological framework and searched a wide range of documents related to work disability policy and practice, including official data, legal and policy texts from both countries, and five prominent academic databases. Three major themes emerged from the policy review and analysis: (i) defining self-employment: contested views; (ii) the relationship between misclassification of SE and social security systems; (iii) existing social security systems for workers and self-employed workers: Ontario and NSW. Our comparative discussion leads us toward conclusions about what might need to be done to better protect self-employed workers in terms of reforming the existing social security systems for the countries. Because of similarities and differences in support available for SE’d workers in the two countries, our study provides insights into what might be required to move the different countries toward sustainable labour markets for their respective self-employed populations.
... Recently, some authors have identified a need for further research to unpack this relationship, especially outside the shrimp farming zones (Roy & Basu, 2020). Our findings point in the same direction as earlier work by Sohns and Revilla-Diez (2017) which shows that offfarm activities cannot be seen as a panacea to improve household's livelihoods in agriculture-dominated areas of developing countries, taking the example of Vietnam. ...
Until the Covid-19 pandemic, Bangladesh had reported consistent improvements regarding its food and nutrition security (FNS) status, and yet, the country still features poor FNS outcomes among parts of its population. In rural coastal regions of the Ganges-Brahmaputra-Meghna delta, farming households' vulnerability is particularly exacerbated by a range of environmental hazards, increasing challenges for agriculture to contribute to higher FNS levels. In the context of existing literature on the trade-offs between subsistence agriculture and cash-earning livelihood activities, vis-à-vis food and nutrition security outcomes, this article assesses the relative contribution of crop diversification vis à vis other factors on the households' Food Consumption Score (FCS) in specific livelihood contexts. We provide differentiated analyses between primarily export-oriented shrimp farming and non-shrimp farming households, so policy makers can better address FNS targets. Quantitative data from 1,188 sample households across the delta were analysed through descriptive and linear regression analyses. Results show that households cultivating shrimp have a significantly higher dietary diversity than households that do not. Among shrimp farmers, crop diversification has the relatively strongest significant positive effect on dietary diversity, suggesting part of the aquacultural crops are geared towards subsistence. By contrast, crop diversification seems to have a negative effect on dietary diversity among households that do not produce shrimp, especially when different agricultural crops are combined. Importantly, both for shrimp and non-shrimp farmers, crop diversification systems combining agriculture with aquaculture, and agroforestry seem to improve diverse diets among households. While by no means a panacea to solving FNS challenges among rural households, we suggest that promoting specific crop diversification systems could be a beneficial pathway to improved FNS outcomes.
... In light of these changes, rural entrepreneurship and self-employment become an essential component in rural development strategies, including the promotion of familybased economic activities. Evidence suggests that such policies have a positive role in addressing income growth, poverty reduction, and depopulation (Green, Zinda, 2013;Sohns, Revilla Diez, 2017). Programmes and projects supporting entrepreneurship and self-employment encourage locally owned, family-based small businesses and livelihood development in rural areas (Robinson et al., 2004). ...
The shift in policy focus from agriculture to rural development enables rural families to diversify their economic activities. Household-based resources, particularly human capital, are essential for capitalizing on newly developed opportunities. Locals with sufficient resources seize possibilities in agriculture and emerging economic sectors such as tourism. A case study (33 in-depth interviews) of Caucasus mountain households in Kazbegi and Mestia municipalities revealed the importance of human capital in attaining other types of resources, such as social and financial capital, and, ultimately, in the process of family-based economic development. Local families are encouraged to engage in and embrace contemporary farming practices in order to determine the most effective sustainable livelihoods. Along with long-established industries, households employ traditional knowledge to enter
entrepreneurial tourism activities.
... Numerous studies have focused on short-term, ex-post coping capacities in response to natural hazards, using the widely established vulnerability framework [23][24][25][26]. The concept was introduced in seminal work by Scoones [14] on the Sustainable Livelihoods Framework (SLF): 'Those who are unable to cope (temporary adjustments in the face of change) or adapt (longer term shifts in livelihood strategies) are inevitably vulnerable and unlikely to achieve sustainable livelihoods' (6). ...
Adaptation to various socio-economic risks attendant to climate change represents an increasing challenge for agrarian populations across the Global South. Rural households mitigate risks through both individual and collective strategies that have proven viable for establishing long-term adaptive capacities. However, while the importance of social interactions has been acknowledged, there has been little in-depth empirical research on the influence of collective structures on vulnerable livelihoods. Based on research with smallholders in rural Vietnam, this paper explores how social capital deployed through informal collective actions compares with the effects of formal collective organisations for the overall adaptive capacity. We apply a mixed-methods approach combining a rich survey dataset from three rural provinces, and qualitative interviews with farmers in four case study villages. The results reveal the emergence of informal and semi-formalised collective actions in farming practices as synergistic supplements to existing formal structures and institutions through mechanisms of social learning.
... At a conceptual level, numerous publications suggest rethinking the land-livelihoods nexus as a 'deagrarianization pathway' (Pritchard et al., 2017), which reiterates the call to look beyond agriculture or land-based livelihoods and examine the rise of the rural non-agrarian sector. Along these lines, the most common response in the literature is to increase the weight of non-farm incomes when analysing rural livelihoods on the basis of case studies in various parts of the developing world (Barrett et al., 2001;Kundu & Chakrabarti, 2010); or to highlight off-farm diversification to complement the farming incomes and to improve the rural economy (Brünjes & Revilla Diez, 2013;Sohns & Revilla Diez, 2016;McNamara & Weiss, 2005). In the Mekong Delta, newly urbanizing and peri-urban areas with particularly dynamic livelihood transitions have been highlighted in this context, as threats but also opportunities implied by larger system transitions observed there in a very direct and clear manner (Garschagen et al., 2011). ...
Over the last decades, the Vietnamese Mekong Delta (VMD) has experienced drastic political, socio‐economic, and ecological changes. On a conceptual level, numerous studies started to emphasize that livelihood shifts are driven by not only climate but also socio‐economic and institutional changes. Nevertheless, on an analytical and operational level, research taking up both aspects of social and ecological changes in analysing the dynamics of livelihood is still lacking. This paper therefore is to present a typology of livelihood transitions to capture complex sets and interactions of environmental and non‐environmental drives for livelihood changes. The paper thus aims at providing a valid representation of the shifts on the ground that can also be used in policy‐making and future research. Using data from a household survey conducted in three provinces (n = 524), we propose a typology of six livelihood‐change trends that reflects the level of intensity of agrarian adjustments, particularly system‐shift versus diversification, as well as the role of non‐agricultural income changes. The typology allows further analysis of characteristics of the six household groups respectively, thereby facilitating the identification of enabling factors and barriers to sustainable livelihood improvements. This classification method can also be transferred to develop similar household livelihood‐change typologies in other contexts.
... Those who are self-employed in non-farm activities cannot be guaranteed a poverty decline in remote rural regions because of their relative geographical isolation, limited assets, poor health status, and low levels of education. The poverty is quite persistent (Arouri et al. 2017;Hoang et al. 2014;Sohns and Diez 2017). ...
... Opportunity-driven entrepreneurs frequently hire non-family employees and make substantial initial investments (Gottschalk, Muller, & Niefert, 2010;Guseva & Rona-Tas, 2001). Although the elimination of inefficient enterprises can be seen as a necessary process for regional economic progress (Boschma & Martin, 2010), the closure of such a micro-enterprise can have a negative impact on the well-being of the business head's family (Sohns & Revilla Diez, 2017), as well as on that of the non-family employees and, due to possible feedback effects, may also affect the regional economy in general. However, in rural Vietnam, there are also micro-enterprises that are run by necessity-driven entrepreneurs, in order to supplement household income for a certain time (Gindling & Newhouse, 2012). ...
To date, most of the empirical work conducted on enterprise survival has focused on enterprises in developed countries, while studies on enterprise survival in rural areas of emerging markets remain scarce. This paper attempts to address this gap in the research by using mixed-effects parametric survival models to analyze the effects of factors, at different explanatory levels, on the survival probability of micro-enterprises in rural Vietnam. The results show that enterprise-specific factors dominate with regard to explaining the survival probability of such micro-enterprises. However, the empirical results also indicate that the linkages of micro-enterprises with their broader economic environment, as well as some location-specific factors, such as access to markets and financial services, contribute significantly towards explaining the survival probability of micro-enterprises in rural Vietnam.
https://doi.org/10.1080/17421772.2019.1535184
... Holding more productive assets (forestland and croplands) was found to have an indirect positive effect on inequality, via its positive effect on household income among rural households in the North Central Region of Vietnam (Nguyen and Tran 2018). A study by Sohns and Revilla Diez (2017) on three provinces in Vietnam indicates that a regionally unequal distribution of assets can increase the vulnerability to poverty of rural households, and this in turn can result in growing regional inequality. Sohns and Revilla suggest that policies for reducing poverty and inquality should focus on equalizing living conditions, notably in terms of education, and eliminating discrimination against ethnic minorities in Vietnam. ...
This study explores the dynamics of income and income inequality in Vietnam from 2004 to 2014. Two main population subgroups are investigated: the ethnic majority, known as the Kinh people, and the minority group, which includes 53 minor ethnicities in Vietnam. The findings show that the income gap among ethnic groups has increased over the last decade. The Gini index decomposition indicates that wages and nonfarm business income are the two main determinants of income inequality. Cultivation and agricultural side-line incomes were relatively evenly distributed, despite their recent smaller equalizing effect. Both sub-population groups have experienced a declining contribution from the agricultural sector to overall household income. Changes in income inequality in Vietnam by income source reflect the change in the structure of the economy from reliance on agriculture to non-agricultural economic activities.
... The majority of these new ventures are non-farm business establishments, also known as micro enterprises (General Statistics Office of Vietnam 2013). These micro enterprises have become an important factor for the development of the rural economy by absorbing surplus labour from the agricultural sector, reducing poverty and slowing down ruralurban migration (Lanjouw and Lanjouw 2001;Van de Walle and Cratty 2004;Gries and Naudé 2010;Sohns and Revilla Diez 2017). ...
In the literature on entrepreneurship, there is an ongoing debate about the impact of regional factors on the entrepreneurial process. To date, most of the empirical work on the influence of regional characteristics on entrepreneurship has focused on developed countries, while empirical work that analyses the regional determinants of micro entrepreneurship in rural areas of emerging markets remains scare. This paper uses three-level binary-logistic random intercept models to analyse the effects of explanatory factors at different levels on micro entrepreneurship in rural Vietnam. Our analyses show that identifying the motivation behind starting a micro enterprise is a good way to split entrepreneurship into two groups:namely opportunity- and necessity-driven entrepreneur-ship, which are influenced by very different explanatory factors at different levels. We find evidence that in rural areas of emerging markets, the individual level dominates with regard to explaining both opportunity- and necessity-driven entrepreneurship. Nevertheless, the regional level has a significant impact, albeit only on opportunity-driven entrepreneurship.
This article analyzes the effect of educational expenditures on the relative monetary poverty gap of Beninese households, measured as the distance between their standard of living and the poverty line. Using a Fractional Regression Model (FRM) and robustness checks via a Generalized Linear Model (GLM), the study draws on data from the Harmonized Survey on Household Living Conditions (EHCVM 2022) to examine educational spending, as well as socioeconomic and cultural factors influencing the relative monetary poverty gap among households burdened by education costs. The results indicate that households’ education expenditures in private schools/universities or mixed institutions (both private and public), the ratio of enrolled children to household size, and economic shocks positively affect their relative monetary poverty gap. The challenge for policymakers is thus to strike a balance between mitigating the immediate financial burden of education on vulnerable households and ensuring broad, equitable access to education to break the intergenerational cycle of poverty.
With the victory of China’s fight against poverty in 2020, the focus of poverty alleviation will shift to prevent poverty reinstatement. With the help of the survey data of 676 poverty-alleviation households in Liangshan Prefecture, this paper identifies the poverty-return risk of poverty-alleviation households and further analyzes its related influence mechanism. The results found that most of the poverty-alleviation households have a low risk of returning to poverty. The impact mechanism shows that the village hardening road compliance status, endogenous development motivation, county per capita GDP, and the proportion of wage income are negatively correlated with the risk of poverty-returning households in Liangshan prefecture; however, this effect has group heterogeneity and is more conducive to reducing the poverty-return risk for those with higher risk of returning to poverty. The number of people with disabilities and the number of people receiving subsistence allowances in the family are positively correlated with the poverty-return risk. And put forward suggestions to prevent poverty return based on industrial development.
Studies from industrialised countries show the importance of non-cognitive skills for occupational outcomes. However, rural labour markets in developing and emerging economies differ from industrialised labour markets, and evidence on the role of non-cognitive skills across labour markets is limited. Using new micro-level data from rural Thailand and Vietnam, we provide unique insights into the role of non-cognitive skills in occupational attainment and earnings in rural labour markets. In particular, we use nine measures (the Big Five personality traits, locus of control, risk, trust, and patience) and confirm their importance for both occupational attainment and individual earnings. We further find that returns to non-cognitive skills differ between developing and developed countries.
How off‐farm employment can enhance welfare in terms of food consumption and poverty alleviation is a critical question facing many developing countries. This study addressed that question by pursuing two objectives: (i) to quantify the impact of off‐farm employment on rural households’ welfare, food security and poverty; and (ii) to examine the factors that affect their decision to work off‐farm. Using panel data, we estimated a difference‐in‐difference combined with a propensity score matching model. The findings show that off‐farm employment improves income, ensures food security and contributes to poverty alleviation. The results also show that age, marital status, education, labour, financial capital, land, location, market access and losses from natural disasters are significant contributing factors to the decision to participate in off‐farm employment. The findings suggest that to improve the welfare of rural households, the Vietnamese government should proceed with policies that enhance their opportunities for participation in off‐farm employment.
This article studies the effects of universal basic education on the vulnerability to poverty in rural China while exploring this mechanism from a capability perspective. A regression-discontinuity design based on the implementation of compulsory education is used to identify the effects with household data. We find that compulsory education has significantly reduced the vulnerability to poverty by popularizing basic education in rural China. Regarding the mechanism itself, vulnerability to structural poverty is the primary source of vulnerability in rural China. Universal basic education’s effect on reducing vulnerability to structural poverty is larger than that on reducing vulnerability to transitory poverty. Further analysis reveals that compulsory education primarily enhances various capabilities to obtain permanent income—such as cognitive abilities, health and the engagement in non-agricultural jobs—which are important pathways to reducing vulnerability to structural poverty. Our findings suggest that universal basic education has a fundamental effect on reducing vulnerability.
Purpose
The purpose of this paper is to explore the existence and determinants of the credit gap in the cinnamon value chain development in Northwestern Vietnam.
Design/methodology/approach
A multi-stage sampling of 548 cinnamon households and a Heckman Selection Model were applied to examine their credit access constraints. In-depth interviews with cooperatives, enterprises, banks and relevant government agencies were further conducted to explain the credit gap.
Findings
In the total 52.74 percent of households that received credit, 24.56 percent of them received an insufficient amount of credit as registered. In addition, 35.77 percent of total households are credit rationed. Although all enterprises and cooperatives had been successful in applying for credit as long as they have collateral, none of them received the full credit amount requested. The credit amount received satisfied 80.64, 43.03 and 44.28 percent of the demand by households, cooperatives and enterprises, respectively. The lack of valuable collateral assets is the most important factor explaining this credit gap. Moreover, membership in a farmer-based union or ownership of a bank account increases the probability of access to credit. Educated household heads with a larger farm size and the Kinh ethnic majority are positively associated with a larger amount of credit. Households with conventional cinnamon farming, more dependents and union non-membership are more likely to be credit rationed.
Practical implications
A reform on collateral management, facilitating access to bank accounts, capacity building for local farmer-based unions, organic certification, granting land use rights and facilitating a platform to share reliable information between relevant actors are needed to bridge the credit gap.
Originality/value
This paper analyses the determinants of credit access constraints by key actors in a medicinal plant value chain that was insufficiently discussed by previous studies in the field.
Household enterprises -- usually one-person-operated tiny informal enterprises -- are a rapidly growing source of employment in Sub-Saharan Africa, especially in lower-income countries. Household enterprises tend to operate with limited interest or support from governments. This is the case in Mozambique, where neither the poverty reduction strategy nor small and medium enterprise development policies include household enterprises. Using multiple household surveys, including a recent panel data set, this paper identifies the characteristics of the sector and its development during the period in which Mozambique experienced rapid economic growth. The analysis finds that household enterprises in Mozambique are associated with higher household consumption, lower rural poverty, as well as upward mobility, particularly for rural and poorly educated households. But if the Mozambican government wants to tap this potential, it will need a different strategy than one designed to support small and medium enterprises, because creation and survival in this sector seems to depend on a set of factors related to the human capital in the household and development in the location, not the soft business environment constraints, such as licensing and permitting and corruption, which are cited by larger business.
Despite 40 percent of households relying on household enterprises (non-farm enterprises operated by a single individual or with the help of family members) as an income source, household enterprises are usually ignored in low-income Sub-Saharan-African development strategies. Yet analysis of eight countries shows that although the fast growing economies generated new private non-farm wage jobs at high rates, household enterprises generated most new jobs outside agriculture. Owing to the small size of the non-farm wage job sector, this trend is expected to continue for the foreseeable future. This analysis of enterprises and their owners shows that although it is a heterogeneous sector within countries, there are many similarities across countries, indicating that cross-country learning is possible. For labor force participants who want to use their skills and energy to create a non-farm income source for themselves and their families, household enterprises offer a good opportunity even if they remain small. The paper finds that given household human capital and location, household enterprise earnings have the same marginal effect on consumption as private wage and salary employment. The authors argue that household enterprises should be seen as part of an integrated job and development strategy.
Although microfinance has elicited different reactions from different stakeholders, there seem to be a general agreement that it is useful in reducing poverty. However the context in which microfinance is of help to rural poor households is not well researched. This study is an attempt to contribute in to the debate on what works and what does not work for microfinance and poverty reduction. Our main objective is to find out under what circumstances microfinance creates jobs, and increases wage employment and higher incomes in the rural areas. We use a rich panel data set collected from the south western part of Makueni district with three observations within eighteen months to study the welfare effects of microfinance on the rural households and the patterns of entry, exit, and growth of micro enterprises, and to compare these with the mainstream theoretical and empirical work on rural development through entrepreneurship.
Climate models generally indicate that climate volatility may rise in the future, severely affecting agricultural productivity through greater frequency of yield-diminishing climate extremes, such as droughts. For Tanzania, where agricultural production is sensitive to climate, changes in climate volatility could have significant implications for poverty. This study assesses the vulnerability of Tanzanias population to poverty to changes in climate variability between the late 20th century and early this century. Future climatescenarios with the largest increases in climate volatility are projected to make Tanzanians increasingly vulnerable to poverty through its impacts on the production of staple grains, with as many as 90,000 additional people, representing 0.26 percent of the population, entering poverty in the median case. Extreme poverty-increasing outcomes are also found to be greater in the future under certain climate scenarios. In the 20th century, the greatest predicted increase in poverty was equal to 880,000 people, while in the 21st century, the highest possible poverty increase was equal to 1.17 million people (approximately 3.4 percent of the population). The results suggest that the potential impacts of changes in climate volatility and climate extremes can be significant for poverty in Sub-Saharan African countries like Tanzania.
The livelihood concept remains consistently utilised within a number of research fields, including development studies, political ecology and conservation. Although there are differences in theory and application, these fields draw upon livelihood frameworks to understand how political and economic structures impact decisionmaking and present opportunities for social actors. Several themes have emerged from livelihoods research, including the importance of institutional frameworks and examinations of the conflicts surrounding resource access. While these have been valuable contributions, there has been less attention directed to the reciprocal relationships between space and livelihood. This article draws upon insights from human geography to show how the production and reproduction of livelihoods are interlinked with the processes producing and reproducing space. In order to accomplish this, the article details research completed in South Africa that examines the diversified resources individuals and households combine to generate livelihoods. It is argued that historical and contemporary geographies shape particular livelihood trajectories and social networks for rural residents, thereby making an explicitly spatial analysis necessary for understanding the processes driving social and environmental change. This article asserts that spatialising livelihoods is critical for understanding multiple issues central to livelihood studies, including the significance of diversification, intra-community differentiation, the structure and agency of livelihoods, and the effects of decisionmaking upon social and environmental systems.
We provide new micro evidence on the discussion about the relation- ship between financial development and welfare. Relying on the concept of local financial development our analysis focuses on three dimensions of household welfare: vulnerability to poverty, investment, and consumption smoothing. Even though we cannot find a significant effect on vulnerability, we provide evidence that financial development is correlated with higher investment and better possibilities to smooth consumption. The extent of both effects is also economically significant. Our results hold for alternative specifications and variations in the measurement of financial development. --
The microfinance industry in Vietnam, particularly those sponsored by non-government organisations (NGOs), has experienced rapid expansion in recent years. While there have been anecdotal reports alluding to their contribution in alleviating poverty, a systematic analysis of this issue has been lacking. In a bid to help address this shortcoming, this paper reports on data that was obtained during a survey and interview process that incorporated various stakeholders including financial donors, NGO-sponsored microfinance institutions (NMPs), village leaders and NMP members and non-members. Firstly, the nature of NMPs is described - their objectives, target groups and the financial products they offer. Secondly, perceptions of NMPs effectiveness are discussed from the standpoint of various stakeholders. NMPs are found to be at a critical juncture. While their activities are widely perceived to contribute to poverty alleviation, their future viability is clouded by donor requirements that they become financially self-sufficient. At the same time, certain government policies make achieving this goal very difficult.
This paper uses a survey of 932 rural households to uncover how the rural credit market operates in Vietnam. Households obtain credit through formal and informal lenders. Formal loans are almost entirely for production and asset accumulation, while informal loans are used for consumption smoothening. The determinants of formal and informal credit demand are distinct. While credit rationing depends on education and credit history, in particular, regional differences in the demand for credit are striking. A 'one size fits all' approach to credit policy in Vietnam would be inappropriate.
The paper analyzes the relationship between off-farm labor allocation and on-farm enterprise diversification as farm household income stabilization strategies with census data from the federal state of Upper Austria, Austria. The results suggest that both on-farm diversification and off-farm labor allocation are related to farm and household characteristics. Larger farms tend to be more diversified. Younger farmers are more likely to work off-farm. Larger farm households tend to allocate more labor to off-farm income activities.
A stylized fact of economic development is the structural transformation of countries from traditional, mainly agricultural societies to modern economies dominated by manufacturing and services. In this paper we provide an endogenous growth model to illuminate the role of entrepreneurial start-up firms in structural economic transformation. We follow the Lewis-model?s distinction between a traditional and modern sector, and underpin this with micro-foundations. We specify mature and start-up entrepreneurs and make a distinction between survivalist self-employment activities in the traditional sector, and opportunity-driven entrepreneurship in the modern sector. The model shows how opportunity-driven entrepreneurship can drive structural transformation through innovation, provision of intermediate inputs and services (which permits greater specialization in manufacturing), and by increasing employment and productivity in both the modern and traditional sectors.
We introduce a new hybrid approach to joint estimation of Value at Risk (VaR) and Expected Shortfall (ES) for high quantiles of return distributions. We investigate the relative performance of VaR and ES models using daily returns for sixteen stock market indices (eight from developed and eight from emerging markets) prior to and during the 2008 financial crisis. In addition to widely used VaR and ES models, we also study the behavior of conditional and unconditional extreme value (EV) models to generate 99 percent confidence level estimates as well as developing a new loss function that relates tail losses to ES forecasts. Backtesting results show that only our proposed new hybrid and Extreme Value (EV)-based VaR models provide adequate protection in both developed and emerging markets, but that the hybrid approach does this at a significantly lower cost in capital reserves. In ES estimation the hybrid model yields the smallest error statistics surpassing even the EV models, especially in the developed markets.
Farm planning generally focuses on optimal diversification with respect to risk and uncertainties, where the risk-management strategies combine production, marketing, financial and environmental responses of the production of farm firm. In this study an empirical examination of farm diversification has been carried out from a sample of farms in Eastern Norway in which four measures of diversification (indices) were defined to incorporate the risk and uncertainties in relation to farm production (total) income. Using these four alternative measures of diversification and panel-data techniques, it has been shown that larger farms are more diversified, and when there is productive location and access to labour the farmers have a greater incentive to spread risk. These results suggest that diversification and farm size are positively linked and that there may not be sufficient economies of scale to warrant specialisation. Alternatively, farm specialisation may not be environmentally desirable because of the soil and water pollution that have been caused by large scale farming systems usually practised in most of the developed countries like Norway. Hence, farm diversification can be used as a strategy for managing the pollution caused by large scale less diversified farming systems, as well as to spread the risk related to farm income.
Learning from successes in agricultural development is now more urgent than ever. Progress in feeding the world’s billions has slowed, while the challenge of meeting future food needs remains enormous and is subject to new uncertainties in the global food and agricultural systems. In the late 1950s around a billion people were estimated to go hungry every day. Scientists, policymakers, farmers, and ordinary people initiated a concerted push to boost agricultural production and productivity in developing countries. Great strides were also made in improving the quality of food and the ability of vulnerable people to access food needed for survival. All these efforts have done more than just feed millions. They have also demonstrated that agriculture can be a key driver of growth and development for many of the world’s poorest countries.
It has increasingly been recognised that rural and urban areas are inextricably interlinked. This book adopts a fresh approach to the issue of rural-urban dynamics through a study of the changing nature of livelihoods, mobility and markets in ten study sites across four countries of Africa and Asia. Building on detailed fieldwork conducted in Ghana, Tanzania, Vietnam and Thailand, the authors explore how settlements and livelihoods are being transformed as long-term inhabitants and recent migrants embrace new economic activities many of which are linked to global markets.
The book is structured around the concept of ‘frontier’ which is conceptualized as being a dynamic space where the forces of economic, demographic and social change are brought to bear. The study sites include agricultural frontiers (coffee, cocoa, pineapples and fresh fruit), handicraft and manufacturing frontiers, and mining frontiers (gold and diamonds). In all of the cases, global value chain dynamics have played a pivotal role in shaping local livelihoods. Some settlements are developing into new urban centres whilst others are suffering from a boom and bust experience due to the unreliability of export markets. The similarities and differences between the frontier settlements are drawn out by comparing frontiers of similar types and by highlighting the theoretical and policy implications of the findings from all the frontier types.
The originality of the book lies in its combination of conceptual clarity, methodological coherence and empirical richness. By combining detailed empirical findings with theoretical insight from debates on livelihoods, global value chains, mobility patterns, settlement dynamics and rural-urban relations, the book sheds new light on these issues within an overall framework of development trajectories in Africa and Asia. Given scholars’ and international agencies’ current interest in the spatial dimensions of economic development, this contribution is particularly timely with its fresh geographical approach to development issues; this book is a pertinent and authoritative read for anyone researching or learning in the field of development.
The role of entrepreneurship in economic development is the subject of much interest to academic and policy circles alike. Entrepreneurship is often credited with many positive changes in developing countries. At the very least, it is associated with job creation, wealth creation, innovation and related welfare effects. A strong small business sector and entrepreneurship are usually linked to a strong economy (Beck et al. 2005). Across developed and developing countries, entrepreneurship has become a critical part of economic development strategies — even goals.
Im folgenden Abschnitt beschäftigen wir uns mit der logistischen Regression für Paneldaten. Die logistische Regression (auch „Logitmodell“) kommt zur Anwendung, wenn die Ausprägungen der abhängigen Variablen eine endliche Anzahl an Kategorien bilden. Hier beschränken wir uns auf den einfachen, aber häufig auftretenden Fall einer dichotomen, d. h. zwei Ausprägungen aufweisenden, abhängigen Variablen. Wir wollen zunächst begründen, warum lineare Regressionsmodelle im Kontext solcher Variablen problematisch sind, bevor wir im nächsten Schritt das logistische Regressionsmodell einführen. Schließlich beschreiben wir, analog zur bisherigen Vorgehensweise, Varianten des Logit- Modells, welche zur Analyse von Paneldaten geeignet sind. Zunächst soll aber der in diesem Abschnitt verwendete Beispieldatensatz beschrieben werden.
Future changes in climate pose significant challenges for society, not the least of which is how best to adapt to observed and potential future impacts of these changes to which the world is already committed. Adaptation is a dynamic social process: the ability of societies to adapt is determined, in part, by the ability to act collectively. This article reviews emerging perspectives on collective action and social capital and argues that insights from these areas inform the nature of adaptive capacity and normative prescriptions of policies of adaptation. Specifically, social capital is increasingly understood within economics to have public and private elements, both of which are based on trust, reputation, and reciprocal action. The public-good aspects of particular forms of social capital are pertinent elements of adaptive capacity in interacting with natural capital and in relation to the performance of institutions that cope with the risks of changes in climate. Case studies are presented of present-day collective action for coping with extremes in weather in coastal areas in Southeast Asia and of community-based coastal management in the Caribbean. These cases demonstrate the importance of social capital framing both the public and private institutions of resource management that build resilience in the face of the risks of changes in climate. These cases illustrate, by analogy, the nature of adaptation processes and collective action in adapting to future changes in climate.
This article investigates whether heterogeneous subgroups of female-headed households are worse off than households headed by men. It analyzes the correlates of consumption, shock exposure, and severity, as well as vulnerability to poverty. Using panel data of over 4000 rural households from Thailand and Vietnam, strong evidence of heterogeneity among subgroups of female-headed households are found. In particular, in comparison with male headed households de facto female-headed ones are found to be richer in Thailand, but prone to more severe shocks in both countries. Furthermore, our results suggest that in Thailand single female-headed households are less vulnerable to poverty than households headed by men. However, in Vietnam these households are particularly poor and vulnerable to poverty; we show that this is mostly due to their greater poverty rather than their higher risk exposure. Our findings suggest that differentiation by subgroups of headship is important for policy development and targeting as well as future research.
This paper investigates the interaction of migration, vulnerability to poverty, and welfare of rural households in three provinces in Central Vietnam. It addresses three questions. (1) To what extent do shocks motivate rural household members to move to urban areas?, (2) Are migrants in the new urban settings better off in terms of working conditions and quality of life?, and (3) What is the effect of migration on rural household’s welfare and vulnerability to poverty? The analysis uses panel data of 2200 households from rural Vietnam covering the period 2007–2010, and a tracking survey of 299 migrants from 2010. The empirical evidence from a probit model shows that migration, especially migration for employment, is a livelihood support strategy for households exposed to agricultural and economic shocks. Migration for education is more likely observed among households with higher human capital and being financially better off. Nevertheless, the probability of migration decreases with the employment opportunity in the village. Migrants perceive themselves to be better off at the place of destination, but income losses from shocks of their rural households may reduce their employment quality. The results from difference-in-difference specifications with propensity score matching techniques suggest that migration has positive income growth effects, and that these effects are more pronounced in provinces with fewer job opportunities. These effects help not only migrant households moving out of poverty, but it also improves the poverty situation in rural areas.
Over half of all workers in the developing world are self-employed. Although some self-employment is chosen by entrepreneurs with well-defined projects and ambitions, roughly two-thirds results from individuals having no better alternatives. The importance of self-employment in the overall distribution of jobs is determined by many factors, including social protection systems, labor market frictions, the business environment and labor market institutions. However, self-employment in the developing world tends to be low-productivity employment, and as countries move up the development path, the availability of wage employment grows and the mix of jobs changes.
The largest gap in understanding self-employment in developing countries is knowing why so many people are self-employed. How many self-employed people came to self-employment after wage employment? Could their wage employment have continued, or were they in casual employment that ended? Are people choosing self-employment because of such nonwage benefits as being one’s own boss and enjoying greater flexibility between work and family responsibilities? What are the roles of family, personal preference, and health status? How do workers’ net earnings in self-employment compare with what they might have earned in wage employment? How do the answers to these questions differ by gender?
Another major gap is the lack of social (rather than personal) cost-benefit analysis of possible policy interventions. How do the direct social benefits of any given intervention compare with the direct social costs? Because there are always policy tradeoffs (the opportunity cost of one policy precluding another), it is important to know which policy intervention produces the highest social benefits relative to its costs. In which circumstances have various policy interventions proved socially beneficial and in which have they not?
Finally, more research is needed to establish how many people are self-employed by choice and how many because they have no choice. The numbers in the second category are clearly large, but greater precision is needed, especially on a country by country basis, to end the controversy over exact numbers.
This paper summarizes the sampling procedure, survey instrument, implementation and selected results of a comprehensive survey among 4,400 rural households conducted in 2007 in six peripheral provinces of Thailand and Vietnam as an initial wave of a panel dataset. The sampling procedure applied was a three-stage cluster sampling with explicit strata for agro-ecological zones in Vietnam and implicit stratification in Thailand. We find an atypical age distribution of the rural population as a result of out-migration of the economically active population, which is more pronounced in Thailand than in Vietnam. The educational attainment of the adult population is rather low in both countries, but generally higher in Vietnam. With respect to income and poverty, the accuracy of the survey estimates is similar or better than for the national surveys in these countries and means are roughly comparable. Per capita income varies stronger in Thailand than in Vietnam and consumption varies much less than income in both countries. The provincial sub-samples differ also with respect to the main sources of income and the importance and intensity of agriculture. The experience of past shocks and the perception of future risks reveal that agricultural and demographic risks are ranked as the most important threats to household welfare. We conclude that the rich data provide a sufficiently accurate basis and a number of domains for comparison through the coverage of distinct economic and ecological conditions. Moreover, the household composition suggests that for further panel waves an inclusion of household members who left for the cities should be included to adequately consider their contribution to the welfare and risk profile of the rural households.
There has been a great deal of the literature on the effects of shocks on a household's well-being as well as on the choice of ex-ante and ex-post strategies in the context of risk exposure. However, researchers have paid little attention to the ability of a household to recover from an adverse event. Additionally, the livelihood of those in the developing world has been increasingly affected by macroeconomic instabilities and extreme weather conditions. This study aims to investigate the forces that shape a household's recovery from misfortune. The analyses are applied to the case of Vietnam by using data collected from household surveys from years 2007 to 2010 and a discrete time proportional hazard model to find the determinants of the shock recovery. The results show that a household's characteristics do not strongly determine the shock recovery but physical assets do. Shocks covariates such as more losses and higher severity make the misfortune harder to recover from. Additionally, coping strategies sometimes help poor households recover better from the losses.
The purpose was to present a family capital typology based on Sustainable Family Business Theory II and to document its relative contribution to short-term firm achievements and long-term sustainability using National Family Business Survey panel data. Family capital was defined as total owning-family resources composed of human, social, and financial capital. Family capital significantly contributed to firm achievements and sustainability. In the short term, all family capital types explained 13.5% of gross revenue variance and 4% of owner’s success perception variance. In the long term, all family capital types explained 26.7% of gross revenue variance and 11.6% of owner’s success perception variance.
Vietnam experienced a dramatic drop in overall poverty during the 90s. However, the poverty reduction showed substantial variation across households, villages and regions. Using a multilevel model on panel data from the rural sample of the Vietnam Living Standard Measurement Survey we demonstrate the important role of villages in household poverty exit dynamics. We also show how an analysis of village-level random effects predictions can help targeting of policies to reduce poverty.
This paper analyzes heterogeneity among the self-employed in 74 developing countries, representing two-thirds of the population of the developing world. After profiling how worker characteristics vary by employment status, it classifies self-employed workers outside agriculture as "successful" or "unsuccessful" entrepreneurs, based on two measures of success: whether the worker is an employer, and whether the worker resides in a non-poor household. Four main findings emerge. First, jobs exhibit a clear pecking order, with household welfare and worker education highest for employers, followed by wage and salaried employees, non-agricultural own-account workers, non-agricultural unpaid family workers, and finally agricultural workers. Second, a substantial minority of own-account workers reside in non-poor households, suggesting that their profits are often a secondary source of household income. Third, as per capita income increases, the structure of employment shifts rapidly, first out of agriculture into unsuccessful non-agricultural self-employment, and then mainly into non-agricultural wage employment. Finally, roughly one-third of the unsuccessful entrepreneurs share similar characteristics with their successful counterparts, suggesting they have the potential to be successful but face constraints to growth. The authors conclude that although interventions such as access to credit can benefit a substantial portion of the self-employed, effectively targeting the minority of self-employed with higher growth potential is important, particularly in low-income contexts. The results also highlight the potential benefits of policies that facilitate shifts in the nature of work, first from agricultural labor into non-agricultural self-employment, and then into wage and salaried jobs.
In this paper we apply the concept of necessity and opportunity entrepreneurship to rural Vietnam. The aim is to evaluate whether opportunity entrepreneurs in rural areas in developing countries have a greater potential to stimulate endogenous non-farm growth than necessity entrepreneurs. The results show that opportunity entrepreneurs are relatively frequent. They have an agricultural background less often and are better educated and skilled. In addition, they are more successful in terms of profits, even after controlling for general business and locational characteristics. However, even rural opportunity entrepreneurs are often not oriented towards employment growth and thus have a limited capacity to generate nonâ€farm employment for other households. It becomes clear that although the necessity/opportunity concept has so far been primarily applied to developed countries, distinguishing opportunity and necessity entrepreneurship is very suitable in a rural developing context if some contextual specifics of the rural environment are taken into account.
Future changes in climate pose significant challenges for society, not the least of which is how best to adapt to observed and potential future impacts of these changes to which the world is already committed. Adaptation is a dynamic social process: the ability of societies to adapt is determined, in part, by the ability to act collectively. This article reviews emerging perspectives on collective action and social capital and argues that insights from these areas inform the nature of adaptive capacity and normative prescriptions of policies of adaptation. Specifically, social capital is increasingly understood within economics to have public and private elements, both of which are based on trust, reputation, and reciprocal action. The public-good aspects of particular forms of social capital are pertinent elements of adaptive capacity in interacting with natural capital and in relation to the performance of institutions that cope with the risks of changes in climate. Case studies are presented of present-day collective action for coping with extremes in weather in coastal areas in Southeast Asia and of community-based coastal management in the Caribbean. These cases demonstrate the importance of social capital framing both the public and private institutions of resource management that build resilience in the face of the risks of changes in climate. These cases illustrate, by analogy, the nature of adaptation processes and collective action in adapting to future changes in climate.
Both livelihoods and diversity have become popular topics in development studies. The livelihood concept offers a more complete picture of the complexities of making a living in rural areas of low income countries than terms formerly considered adequate, such as subsistence, incomes, or employment. Diversity recognizes that people manage by doing many different things rather than just one or a few things. This book sets out the rural livelihoods approach within the larger context of past and current themes in rural development. It adopts diversity as its principal theme and explores the implications of diverse rural livelihoods for ideas about poverty, agriculture, environment, gender, and macroeconomic policy. It also considers appropriate methods for gaining quick and effective knowledge about the livelihoods of the rural poor for project and policy purposes.
Vietnam is highly prone to climatic hazards, including extreme weather events and marked seasonal changes. Climatic hazards have wide-ranging implications for human health, but in most hazard-prone countries there has been little household level research on health risks. Drawing on the results of exploratory research in low-income communities in the Central Provinces and the Mekong Delta, this paper uses a qualitative approach to examine how the social dimensions of vulnerability can come into play in the generation of health outcomes associated with hazards. It explores particularly how aspects of economic livelihood, physical location, education and protective behaviour combined to influence the exposure and susceptibility of households, as well as to shape their capability to avoid adverse health impacts. These aspects were closely linked with, but not solely determined by, income-poverty: underlining the argument that understanding of risks to health in low-income settings requires careful analysis of this complex shaping of vulnerability. It also requires recognition that health protection for the poor may be articulated more in terms of protection of wider livelihood assets than preventive health actions per se.
The microenterprise earnings of microfinance clients in southeastern Sri Lanka are linked to their initial incomes. Poorer clients face geographic, financial and sociocultural barriers to entry to the most promising microenterprise occupations, leading them to select low-value activities with poor growth prospects. In semi-urban areas, poverty impacts could be strengthened by supplementing loans with nonfinancial interventions encouraging poor clients to select higher-value occupations. In arid rural areas, where microenterprises face severe market and infrastructure constraints, microenterprise development is unlikely to facilitate poverty exit.
The number of people engaged in micro and small enterprises increases as a result of new enterprises being started and through an expansion of existing activities. As a partial offset to these increases, employment declines when existing businesses cease operations. This article draws on recent survey work to examine the magnitude and determinants of enterprise births, closures and expansions. It explores the ways in which these different sources of change are influenced by the state of the macroeconomy, and examines policy and project implications.
ABSTRACT : This paper looks at how well Finland performs in high growth entrepreneurship and uses data from the Global Entrepreneurship monitor to benchmark Finland against other European countries. It is found that Finland’s prevalence rate of high growth entrepreneurial activity lags significantly behind most of its European and all of its Scandinavian peers. That this weak performance in high-growth entrepreneurship goes hand in hand with Finland being a world leader in per capita investment in R&D may be described as a paradox. The reasons underlying the underperformance of Finland remain however unclear. At this point, explanations should be sought in culture, industrial traditions and systemic experience in high growth entrepreneurship.
The paper analyzes the relationship between the allocation of labor and land of the households, the number of crops grown and the number of income sources of the households with different types of shocks and risks. It uses the data from the first phase of the household survey in three provinces of Central of Vietnam, conducted within the scope of the DFG research project “Impact of shocks on the vulnerability to poverty: consequences for development of emerging Southeast Asian economies”. The results suggest that the households diversify their portfolio (labor and land) into different income generating activities in order to cope with shocks. Among the different types of shocks and risks, agriculture and economic shocks and risks are the main factors to explain the (ex-post) risk-coping strategies and the (ex-ante) risk management of the households. The number of crops grown and the number of income sources from the households experienced with shocks are higher than others. In addition, the high-risk expectation households diversify their labor and land more than the low risk expectation households. The access to credit and market, the number of household labor, the education of the household head, and the wealth of the household are also very important factors that impact on the diversification level of the households.
This paper analyzes empirically the determinants of new born firms' initial size. As survival prospects of young firms tend to be linked to a firm's start-up size, a better understanding of the factors influencing start-up size is crucial. Most of the rare literature on initial firm size focuses on industry characteristics. We contribute to the understanding of the determinants of initial firm size by analyzing firm specific factors such as founders' human capital composition and entry strategies. We find that in addition to industry effects start-up size is considerably influenced by the human capital of firm founders. We distinguish between generic and specific human capital. Generic human capital refers to the general knowledge acquired through formal education and professional experience and usually coincides with a higher personal wealth. Specific human capital comprises competences that can be directly applied to the entrepreneurial job. For generic human capital we find that having a university degree has a positive influence on start-up size. The same applies for general working experience proxied by the founder's age. For the specific human capital components we find that successful entrepreneurial experience and managerial experience gained in dependent employment support a higher start-up size. Altogether, specific human capital tends to have a larger impact on initial size than generic human capital. Entry strategies are expected to have a crucial influence on start-up size, because objectives of market entry largely determine the resources a firm requires. We distinguish between different types of entry strategies. On the one hand, we look at entry strategies based on innovation. We measure innovation by a variable which indicates if a firm carries out continuous R&D. On the other hand, entry is classified according to the main motive of the founders for firm formation. We conclude that different motives are accompanied by diverse entry strategies. The
In 2002 Malawi experienced a serious shortage of cereals due to adverse climatic conditions. The World Food Programme assumed that about 2.1 to 3.2 million people were threatened of starvation at that time. However, not much research has been undertaken to investigate the actual consequences of this crisis. In particular, little is known about how the crisis affected the health status of children. Obviously, quantifying the health impact of such a crisis is a serious task given the lack of data and the more general problem of relating outcomes to specific shocks and policies. In this paper a difference-in-difference estimator is used to quantify the impact of the food crisis on the health status of children. The findings suggest that at least in the short run, there was neither a significant impact on child mortality nor on malnutrition. This would suggest that the shock might have been less severe than initially assumed and that the various policy interventions undertaken at the time have been effective or at least sufficient to counteract the immediate effects of the crisis.
Are the household characteristics that are good for transition to a more diversified market-oriented development process in Vietnam also important for reducing poverty? Or are there tradeoffs? The determinants of both poverty incidence and participation in rural off-farm activities are modeled as functions of household and community characteristics using comprehensive national household surveys for 1993 and 1998. Despite some common causative factors, such as education and region of residence, the processes determining poverty and inhibiting diversification are clearly not the same. Participation in the emerging rural nonfarm market economy will be the route out of poverty for some, but certainly not all, of Vietnam's poor.
The 1990s have witnessed several financial crises, of which the East Asia and Mexico tequila crises are perhaps the most well known. What impact have these crises had on labor markets, household incomes, and poverty? Total employment fell by much less than production declines and even increased in some cases. However, these aggregates mask considerable churning in employment across sectors, employment status, and location. Economies that experienced the sharpest currency depreciations suffered the deepest cuts in real wages, though deeper cuts in real wages relative to gdp were associated with smaller rises in unemployment. To some extent, families smoothed their incomes through increased labor force participation and private transfers, though the limited evidence available suggests that wealthier families were better able to smooth consumption. The initial impact of the crises was on the urban corporate sector, but rural households were affected as well and in some instances suffered deeper losses than did urban families. School enrollment declined, especially among poorer families, as did use of health facilities, but he impact on children's nutrition levels appears to vary. Crises have typically proved short-lived, but whether households plunged into poverty during a crisis are able to recover as the economy does remains an open question. Copyright 2002, Oxford University Press.
The accuracy of the measured income of family enterprises is a matter of importance in studies of, inter alia, human capital, income distribution, and consumption behavior. Enterprise surveys can measure this income through detailed questions. Household surveys offer a better perspective for a study of living standards and poverty: they capture more of the truly small-scale one-person enterprises; there is a wealth of relevant information about the household; and household surveys allow one to integrate family enterprises into household decisions about labor supply, risk sharing, enterprise start-up, and asset formation.
This paper examines three enterprise income values that one may derive from household surveys held in the Côte d'Ivoire and Ghana. The three values vary much and do not correlate all that well. This sobering conclusion implies that relying on self-reported values of sales revenue, expenditures and enterprise earnings is risky. Greater effort should be made to measure the transactions of enterprises carefully. Using worksheets and cross-checking responses in loco should help, but since many enterprises do not use any accounting system, it may be necessary to monitor inflows and outflows either personally or with diaries.
There is a growing consensus among natural and social scientists that sustainability depends on maintaining natural capital. However, progress to put this ecological condition to practice has been slow, not least because of the inability of making these objectives measurable. Therefore, to overcome this obstacle, assessment frameworks for natural capital are needed. This study presents a simple framework for national and global natural capital accounting. It demonstrates, using the example of Italy, an accounting framework which tracks national economies’ energy and resource throughput and translates them into biologically productive areas necessary to produce these flows. This calculation has been applied to over 52 countries. With this framework, based on the ecological footprint concept, human consumption can be compared with natural capital production at the global and national level, using existing data.