Rural Development and Unemployment Reduction

The objective of this paper is to study the link between rural regional development strategies and unemployment reduction in agricultural regions. Based on empirical data, the paper presents the assessment of the "diversification effects" for the regional labor demand achieved through the development of the non-state sector, small businesses and the service market on the regional labor markets' behavior. By using the regression models we analyze how labor market performances depend on the patterns of the employment structure. Special attention is paid to the comparative analysis of agrarian and industrial regions. It is shown that high rates of employment in the agriculture weaken the position of the region on the labor market. However, diversification of the employment structure of the agricultural regions is a factor reducing the risk of rural unemployment. In rural regions the development of non-agricultural employment produces positive effects on the regional labor markets' behavior. We study the relationships of the labor market performance with the key directions of the economic reform like changes in the ownership structure, development of small businesses and the service market.