This paper examines the employment generation potential of watershed development programmes and identifies the factors that contribute to the shift in labour absorption in farming activities over control situation. Analysis of secondary data collected from the watershed implementing agencies revealed that on an average watershed programmes helped to generate one time employment ranged between 26 and 76 mandays per hectare, for soil conservation, forestry and other works. Primary survey revealed that utilization percentage out of available labour at average households increased due to watershed development programmes. Employment elasticity with respect to various factors of production in crop cultivation worked out and showed negative price elasticity of demand for labour whereas, employment elasticity with respect to all other factors were found to be positive indicating their positive influence on labour demand. A decomposition analysis revealed that about 61% of the employment growth in watersheds over control situation was attributable to technology effect. Labour efficiency was much higher in the watershed than the control villages as evident from higher labour income. The study establishes that the watershed development programme had the potential of creating huge employment opportunities at the farm level in semi-arid tropical region of India.
Key words: Decomposition analysis, employment elasticity, labour demand, profit function, watershed.
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