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Entrepreneurship and Income Inequality in Southern Ethiopia

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Kimhi, Ayal

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Abstract

This paper uses inequality decomposition techniques in order to analyse the consequences of entrepreneurial activities to household income inequality in southern Ethiopia. A uniform increase in entrepreneurial income reduces per capita household income inequality. This implies that encouraging rural entrepreneurship may be favourable for both income growth and income distribution. Such policies could be particularly successful if directed at the low-income, low-wealth, and relatively uneducated segments of the society.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2009/RP2009-05.pdf
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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number UNU-WIDER Research Paper RP2009/05.

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Length: 15
Date of creation: 2009
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Handle: RePEc:unu:wpaper:rp2009-05

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Keywords: entrepreneurship; income inequality; redistribution; Ethiopia; Africa;

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    Other versions:
  2. Block, S. & Webb, P., 2001. "The dynamics of livelihood diversification in post-famine Ethiopia," Food Policy, Elsevier, vol. 26(4), pages 333-350, August. [Downloadable!] (restricted)
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  7. Woldenhanna, T. & Oskam, A., 2001. "Income diversification and entry barriers: evidence from the Tigray region of northern Ethiopia," Food Policy, Elsevier, vol. 26(4), pages 351-365, August. [Downloadable!] (restricted)
  8. Marco Cagetti & Mariacristina De Nardi, 2006. "Entrepreneurship, Frictions, and Wealth," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 835-870, October. [Downloadable!] (restricted)
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  9. Shorrocks, Anthony F, 1983. "The Impact of Income Components on the Distribution of Family Incomes," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 311-26, May. [Downloadable!] (restricted)
  10. Joseph Deutsch & Jacques Silber, 2004. "Measuring the Impact of Various Income Sources on the Link between Inequality and Development: Implications for the Kuznets Curve," Review of Development Economics, Blackwell Publishing, vol. 8(1), pages 110-127, 02. [Downloadable!] (restricted)
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  15. Kanbur, S M Ravi, 1982. "Entrepreneurial Risk Taking, Inequality, and Public Policy: An Application of Inequality Decomposition Analysis to the General Equilibrium Effects of Progressive Taxation," Journal of Political Economy, University of Chicago Press, vol. 90(1), pages 1-21, February. [Downloadable!] (restricted)
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    Other versions:
  19. Quadrini, Vincenzo, 1999. "The Importance of Entrepreneurship for Wealth Concentration and Mobility," Review of Income and Wealth, Blackwell Publishing, vol. 45(1), pages 1-19, March.
  20. Cesaire Meh, 2005. "Entrepreneurship, Wealth Inequality, and Taxation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(3), pages 688-719, July. [Downloadable!] (restricted)
  21. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January. [Downloadable!] (restricted)
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  22. Philippe Aghion, 2002. "Schumpeterian Growth Theory and the Dynamics of Income Inequality," Econometrica, Econometric Society, vol. 70(3), pages 855-882, May. [Downloadable!] (restricted)
  23. Galor, Oded, 2000. "Income distribution and the process of development," European Economic Review, Elsevier, vol. 44(4-6), pages 706-712, May. [Downloadable!] (restricted)
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