Determinants of the Rural Nonfarm Economy in Tajikistan

This paper explores determinants of participation, intensity and the magnitude of the rural nonfarm economy (RNFE) in Tajikistan. Conducting analysis at the district level, in addition to traditional individual and household levels, helps to test the impact of institutional determinants of the RNFE invariant at the micro level. We have found that rural residents in Tajikistan are mostly pushed into nonfarm activities in areas with scarce land resources of poor quality. Moreover, market imperfections in the agricultural sector are also found to induce participation and intensity of the rural nonfarm activities. While nonfarm activities are found to be mostly driven by “push” factors, poor education and the access to infrastructure are found to be important barriers constraining the poor from participation in nonfarm activities.