Does the nonfarm economy offer pathways for upward mobility? Evidence from a panel data study in Ethiopia
AbstractEmpirical studies across many developing countries routinely document a positive correlation between participation in rural nonfarm employment and households’ wealth or income. This paper explores whether nonfarm employment leads to higher consumption expenditure growth in Ethiopia. We find that: 1) households’ consumption expenditure growth is positively correlated with the initial share of nonfarm income; 2) the growth elasticity of nonfarm income share is higher for wealthier households; and 3) the main source of growth for nonfarm participants comes from the higher rates of return participants enjoy on their human and physical capital.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 35754.
Date of creation: 2010
Date of revision: 2011
rural nonfarm; income dynamics; income diversification; Africa; Ethiopia; impact;
Other versions of this item:
- Bezu, Sosina & Barrett, Christopher B. & Holden, Stein T., 2012. "Does the Nonfarm Economy Offer Pathways for Upward Mobility? Evidence from a Panel Data Study in Ethiopia," World Development, Elsevier, vol. 40(8), pages 1634-1646.
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
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