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Poverty and the rural nonfarm economy in Oromia, Ethiopia

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  • Marrit van den Berg
  • Girma Earo Kumbi
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    Abstract

    The rural nonfarm sector has gained increasing importance not only in Asia but also in Africa. It is, however, widely believed that in most parts of Africa, the growth of the nonfarm economy has increased inequality and has had a limited effect on the poor, who face entry barriers to nonfarm activities. The present article analyzes the relation between nonfarm income, poverty, and inequality in Oromia, Ethiopia. We use two complementary methodologies: (i) econometric estimates of household income from the nonfarm sector; and (ii) a Gini decomposition of analysis income inequality by source. The results consistently indicate that in Oromia entry barriers to nonfarm activities is low, and the general growth of the sector will benefit the poor. Copyright 2006 International Association of Agricultural Economists.

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    Bibliographic Info

    Article provided by International Association of Agricultural Economists in its journal Agricultural Economics.

    Volume (Year): 35 (2006)
    Issue (Month): s3 (November)
    Pages: 469-475

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    Handle: RePEc:bla:agecon:v:35:y:2006:i:s3:p:469-475

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    Cited by:
    1. Lay, Jann & Mahmoud, Toman Omar & M'Mukaria, George Michuki, 2008. "Few Opportunities, Much Desperation: The Dichotomy of Non-Agricultural Activities and Inequality in Western Kenya," World Development, Elsevier, vol. 36(12), pages 2713-2732, December.
    2. Atamanov, Aziz & Van den Berg, Marrit, 2012. "Determinants of the rural nonfarm economy in Tajikistan," MERIT Working Papers 080, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Kimhi, Ayal, 2011. "Can Female Non-Farm Labor Income Reduce Income Inequality? Evidence from Rural Southern Ethiopia," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114756, European Association of Agricultural Economists.
    4. Sosina Bezu & Christopher Barrett, 2012. "Employment Dynamics in the Rural Nonfarm Sector in Ethiopia: Do the Poor Have Time on Their Side?," Journal of Development Studies, Taylor & Francis Journals, vol. 48(9), pages 1223-1240, September.
    5. Demeke, Abera Birhanu & Zeller, Manfred, 0. "Weather Risk and Household Participation in Off-farm Activities in Rural Ethiopia," Quarterly Journal of International Agriculture, Humboldt-Universität zu Berlin, vol. 51.
    6. Ayal Kimhi, 2010. "Entrepreneurship and income inequality in southern Ethiopia," Small Business Economics, Springer, vol. 34(1), pages 81-91, January.
    7. Lay, Jann & Schüler, Dana, 2008. "Income Diversification and Poverty in a Growing Agricultural Economy: The Case of Ghana," Open Access Publications from Kiel Institute for the World Economy 39907, Kiel Institute for the World Economy (IfW).
    8. Tran, Tuyen & Vu, Huong, 2013. "Farmland loss, nonfarm diversification and inequality: A micro-econometric analysis of household surveys in Vietnam," MPRA Paper 47596, University Library of Munich, Germany.
    9. Namara, Regassa E. & Hanjra, Munir A. & Castillo, Gina E. & Ravnborg, Helle Munk & Smith, Lawrence & Van Koppen, Barbara, 2010. "Agricultural water management and poverty linkages," Agricultural Water Management, Elsevier, vol. 97(4), pages 520-527, April.
    10. Bezu, Sosina & Barrett, Christopher B., 2010. "Activity Choice in Rural Non-farm Employment (RNFE): Survival versus accumulative strategy," MPRA Paper 55034, University Library of Munich, Germany.

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