This paper attempts to identify the trends in household employment patterns as well as factors determining household occupational choices in rural northwest Pakistan. A comparative analysis of the employment structure with surveys conducted in 1967-68 and 1986-87 reveals that there has been a major growth in non-farm activities over the past four decades with the share of exclusively farming sector reduced from 31% in 1967-68 to just 8% in 2005-06. Similarly the share of household combing farming with non-farm activities also reduced to 16%. At present, within non-agricultural sector 27% of the households are engaged in business related activities while about 50% find their livelihood in wage-salary sector. This development is caused by a large increase in population as well as shrinking of the employment opportunities in the farming sector. Likewise, results from the multinomial logit model reveal that household size, access number of young household workers, additional working members, and per capita income, are important determinants of a household employment choice. The paper concludes that in order to uplift rural areas, non-farm employment sector may be given due importance in the national development policies.
