This paper attempts to explain changes in rural cottage industry (RCI) employment by means of a Central Javanese case study of the rural tile industry. It demonstrates that a decline in employment in this industry, despite a favourable rural industrial environment, is largely due to transition from household-based production to production by more specialised and productive units, with some functions, e.g. marketing and transport, being contracted out, and providing employment for those originally involved in household-based production. Transition has occurred in areas with access to wider markets and improved technology.
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Sandee et al. (1989) studied this question.