Institute for Social and Economic Change
Working Paper: 515
Effects of Covid-19 Pandemic on the Rural Non-farm
Self-employed in India: Does Skill Make a Difference?
The study examines the importance of skills, especially through vocational training, for the rural non-farm sector in overcoming the disruptions caused by the Covid-19 pandemic. We have used the difference-in-differences technique to assess the differential impact of the Covid-19 pandemic on the earnings of skilled and unskilled self-employed activities. The primary data has been collected from 880 rural non-farm self-employed (RNFS) individuals spread over different regions of Karnataka. Although every section of the rural non-farm activities has been adversely affected due to the pandemic, the impact is more severe on unskilled individuals as compared to skilled individuals. A difference-in-differences analysis across different income quantiles shows that imparting skill through formal vocational training is critical to every section of the RNFS. Even though skill plays an important role in promoting RNFS businesses, a large number of self-employed individuals do not show an inclination to participate in formal vocational training programmes. Therefore, policymakers need to pay attention to enhancing the provision of formal vocational training for rural non-farm self-employed individuals on a grander scale.