The process of transition in rural economy has been observed with the deepest and fastest structural transformation from farm to non-farm sector in Pakistan. The structure and composition of labour market is also undergoing such considerable changes due to increasing share of the non-farm sector. Given this insight, the study assesses the change in rural economy particularly relying on population and migration trend and employment transition. The descriptive analysis of the study reveals that there
is declining trend in migration from rural to urban areas with a considerable transition in employment from farm to non-farm sectors. The factor analysis points out the fact that push incentives of the farm sector are stronger than the pull incentives of the nonfarm sector for the movement of labour away from the farm sector in Pakistan. Hence, an immense focus is required for the farm sector in the lieu of employment opportunity while creating more diversification in non-farm activities in rural areas. Thus, there is also a dire need to enhance occupational activities such as agro-based processing, new farming practices, livestock, small scale manufacturing, retail trade, construction etc. to enhance the earnings of labour in the rural economy.
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