Approximately 70 percent of India’s population lives in rural areas and around 58 percent of the total numbers of workers in India are directly employed in the agricultural sector. Simultaneously, the Indian agricultural sector is largely dependent on rainfall and susceptible to climate change.
A recent paper in Agricultural Economics investigates occupational diversification among household members in rural India as a strategy to adapt to and mitigate against the risks arising from variable rainfall.
The study combines a variety of data from different sources, including household survey data from the National Sample Survey (NSS), district-level data on topography from the Food and Agriculture Organization (FAO), infrastructure data from the Indian Village Census, and daily rainfall data from the India Meteorological Department. Through a series of equations, the study tests the occupational choices of household heads and household members - including whether they are employed in agricultural or non-agricultural work and whether they are self-employed - with a number of explanatory variables that drive these occupational choices. The explanatory variables considered are rainfall variability, access to physical capital and infrastructure, and level of human capital (such as level of education and size of landholdings).
High rainfall variability has a significant effect on people’s occupational choices, driving both household heads and household members toward employment in the non-agricultural sector. The effect is largest for household members when a household head is employed in agriculture. The study also finds a correlation between average temperature (measured over a 30-year period) and occupational choices; specifically, a 1 degree rise in temperature is associated with a 0.5 percent lower probability that any household member is employed in agriculture.
Regarding the other explanatory variables, the study finds that access to improved infrastructure (village access to paved roads and postal services) is positively correlated with a higher likelihood that household members (non-household heads) are employed in the non-agricultural sector when the household head is employed in agriculture. By contrast, the study does not find a significant relationship between access to credit and occupational choice. Similarly, a significant relationship is not found between the level of education in a household and occupational choice. This finding suggests that increased education likely supports occupational choice for both sectors; increased education can increase agricultural productivity, thereby facilitating agricultural employment, and can also provide opportunities for non-agricultural occupations.
The study also finds that increased access to irrigation at the household level is correlated with a higher incidence of agricultural occupation among all household members. The study argues that this relationship shows the strong potential of irrigation to support adaptation to climate change in the agricultural sector. This is because irrigation weakens the effect of rainfall variability on agricultural productivity and also increases agricultural output by allowing for increased.
A major limitation, which the authors identify as an area for future research, is that the study does not measure to what extent rainfall variability, and the other variables considered, affects household welfare and earnings.
By: Bas Paris