The Impact of Agricultural Growth on Rural Non-Farm Incomes and Employment in Alabama

The rural nonfarm economy is the backbone of the economy of numerous small towns scattered throughout the Black Belt region, as well as the primary source of income and employment. Seen in this light, the rural nonfarm economy will play a key role in determining future prospects for employment growth and poverty alleviation in the Alabama Black Belt region. The objective in this paper therefore is to examine the importance of rural-urban growth linkages with a focus on the Black Belt region and estimate agricultural growth multipliers. The analysis uses cross-section data to estimate econometrically the indirect rural employment and income generated by agricultural growth. Two major sections address the study objective. The first examines the importance, composition and location of nonfarm activity, as well as general trends over the past decades. After reviewing previous growth linkage studies, the second section explores the relationship between agriculture and changes in nonfarm activities.Rural-Urban Linkages, Counties, Multipliers, Employment, Agribusiness, Labor and Human Capital, Research Methods/ Statistical Methods,

Analysis of Non-Farm Employment Growth in Alabama

Aims: The paper examines the economic linkages between rural farm and rural non-farm sectors in Alabama. Because growing land scarcity and land conversation pressure from urban development raises concerns about prospects for rural labor absorption, the paper highlights the impact of agricultural growth on rural nonfarm employment. Study Design: Cross-section study. Place and Duration of Study: Alabama counties, 2001 - 2007. Methodology: The analysis employs cross-section county-level data to test the null hypothesis of no significant relationship between agricultural and non-agricultural employment growth in Alabama. The hypothesis is tested using instrumental variables approach. Results: The key findings suggest that growth of the rural agricultural employment sector positively influences growth in the non-agricultural employment sector. The average multiplier was estimated at 1.10 percent, implying that one percent growth of the rural agricultural sector induces 1.10 percent growth of the non-agricultural sector in Alabama. Conclusion: The results support the conclusion reached by previous studies that although agriculture continues to play a central role in rural development, the promotion of complementary engines of rural growth is of paramount importance

The Impact of Agricultural Growth on Rural Non-Farm Incomes and Employment in Alabama

The rural nonfarm economy is the backbone of the economy of numerous small towns scattered throughout the Black Belt region, as well as the primary source of income and employment. Seen in this light, the rural nonfarm economy will play a key role in determining future prospects for employment growth and poverty alleviation in the Alabama Black Belt region. The objective in this paper therefore is to examine the importance of rural-urban growth linkages with a focus on the Black Belt region and estimate agricultural growth multipliers. The analysis uses cross-section data to estimate econometrically the indirect rural employment and income generated by agricultural growth. Two major sections address the study objective. The first examines the importance, composition and location of nonfarm activity, as well as general trends over the past decades. After reviewing previous growth linkage studies, the second section explores the relationship between agriculture and changes in nonfarm activities