Participation in off-farm employment in rural Mexico: the role of individual attributes, the local context, and social networks

Income from off-farm sources is especially important for land-poor households. However, the pattern of participation in off-farm activities is heterogeneous across space. We explore the determinants of participation in off-farm non-agricultural employment using data for rural Mexico. In particular, we try to understand how the neighborhood and the neighbors’ characteristics and choices affect the individual decision to participate in off-farm labor markets. We find that neighbors’ participation in off-farm non-agricultural employment has a significant impact on the individual choice of occupation, even after controlling for availability of opportunities. The role of neighbors’ employment choices is more important for groups that are less likely to participate in non-agricultural rural employment such as women, indigenous, the elder, and land-owners. This finding suggests an important role for networks and referrals in the job-search process of rural house-