The effect of off-farm economic activities on rural-urban migration in Brazil

Rural-urban migration models commonly assume that rural income and employment are mainly derived from the farm economy. Many studies of rural labor markets in developing countries, however, have indicated that a significant portion of rural employment occurs in nonfarm activities. The present study incorporates the rural nonfarm economy in the traditional rural-urban migration framework, as a determinant of rural labor relocation. Brazil was used as a case study due to the economic and demographic changes experienced by this country during the period between 1960 and 1980. The migration model was estimated in a system of regression equations, which used cross-state aggregate data for Brazil.

The results showed that rural income was negatively related rural out-migration, and that urban income in the Southeast region influenced rural-urban migration positively. In respect to the rural nonfarm economy, the study showed that the farmers' share of non-agricultural earnings was positively related to rural income in the lower agricultural average product regions. The findings also showed that education and rural infrastructure were positively related to rural income; and that agricultural modernization policies influenced rural income negatively. It was concluded that rural out-migration in Brazil during the period between 1960-1980 was influenced by the rural-urban earnings differential, and that the rural nonfarm economy was an important deterrent of rural outmigration in the lower agricultural average product regions. Also, the policies toward agricultural modernization during the period considered displaced farm labor, and, consequently, induced rural out-migration.