Using individual level employment data from
Bangladesh, this paper presents empirical evidence on the
relative importance of farm and urban linkages for rural
nonfarm employment. The econometric results indicate
that high return wage work and self-employment in
nonfarm activities cluster around major urban centers.
The negative effects of isolation on high return wage work and on self-employment are magnified in locations
with higher agricultural potential. The low return
nonfarm activities respond primarily to local demand
displaying no significant spatial variation. The empirical
results highlight the need for improved connectivity of
regions with higher agricultural potential to urban centers
for nonfarm development in Bangladesh.