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Poverty and the rural nonfarm economy in Oromia, Ethiopia

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  • Marrit van den Berg
  • Girma Earo Kumbi

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.

Suggested Citation

  • Marrit van den Berg & Girma Earo Kumbi, 2006. "Poverty and the rural nonfarm economy in Oromia, Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 35(s3), pages 469-475, November.
  • Handle: RePEc:bla:agecon:v:35:y:2006:i:s3:p:469-475
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    References listed on IDEAS

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    1. Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics, Blackwell, vol. 26(1), pages 1-23, October.
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    Cited by:

    1. 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.
    2. 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.
    3. Villegas, Laura & Smith, Vincent H. & Atwood, Joe & Belasco, Eric, 2. "Does Participation In Public Works Programs Encourage Fertilizer Use In Rural Ethiopia?," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(2).
    4. 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.
    5. 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.
    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. Smale, Melinda & Mathenge, Mary K. & Opiyo, Joseph, 2015. "Nonfarm Work and Fertilizer Use Among Smallholder Farmers in Kenya: A Cross-Crop Comparison," Working Papers 206441, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
    9. 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.
    10. 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).
    11. 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.
    12. Adugna, Lemi, 2009. "Determinants of Income Diversification in Rural Ethiopia: evidence From Panel Data," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 18(1).
    13. Bezu, Sosina & Holden, Stein, 2014. "Are Rural Youth in Ethiopia Abandoning Agriculture?," World Development, Elsevier, vol. 64(C), pages 259-272.
    14. Mintewab Bezabih & Andrea Mannberg & Eyerusalem Siba, 2014. "The land certification program and off-farm employment in Ethiopia," GRI Working Papers 168, Grantham Research Institute on Climate Change and the Environment.
    15. Benjamin Tetteh Anang, 2017. "Effect of non-farm work on agricultural productivity: Empirical evidence from northern Ghana," WIDER Working Paper Series 038, World Institute for Development Economic Research (UNU-WIDER).
    16. 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.
    17. Tran Quang Tuyen, 2016. "Income sources and inequality among ethnic minorities in the Northwest region, Vietnam," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 18(4), pages 1239-1254, August.

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