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Determinants of non-farm employment and non-farm earnings in Ecuador

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  • Vasco, Cristian
  • Tamayo, Grace Natalie

Abstract

This article analyses the determinants of both participation in non-farm employment and nonfarm earnings in Ecuador. Using the Dubin-McFadden two-step estimation method, the results show that women are more likely than men to engage in non-farm self-employment but earn significantly less than men employed in the non-farm sector. Non-farm wage employment is a common choice among more educated individuals in landless households, while farm wage employment seems to be the only source of employment for uneducated landless people. Participation in non-farm work is more likely in areas located near medium-sized cities with dynamic economies. Finally, there are regional differences in employment patterns which appear to be associated with both the availability and the quality of land. This information is relevant in relation both to rural population growth and to the continuous process of land fragmentation in rural Ecuador.

Suggested Citation

  • Vasco, Cristian & Tamayo, Grace Natalie, 2017. "Determinants of non-farm employment and non-farm earnings in Ecuador," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
  • Handle: RePEc:ecr:col070:42009
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    File URL: http://repositorio.cepal.org/handle/11362/42009
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    References listed on IDEAS

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    1. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-362, March.
    2. Elbers, Chris & Lanjouw, Peter, 2001. "Intersectoral Transfer, Growth, and Inequality in Rural Ecuador," World Development, Elsevier, vol. 29(3), pages 481-496, March.
    3. Lanjouw, Peter, 2001. "Nonfarm Employment and Poverty in Rural El Salvador," World Development, Elsevier, vol. 29(3), pages 529-547, March.
    4. Alberto Isgut, 2004. "Non-farm Income and Employment in Rural Honduras: Assessing the Role of Locational Factors," Journal of Development Studies, Taylor & Francis Journals, vol. 40(3), pages 59-86.
    5. Sonia Laszlo, 2005. "Self-employment earnings and returns to education in rural Peru," Journal of Development Studies, Taylor & Francis Journals, vol. 41(7), pages 1247-1287.
    6. Frank Ellis, 2000. "The Determinants of Rural Livelihood Diversification in Developing Countries," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 289-302.
    7. Aziz Atamanov & Marrit Van den Berg, 2012. "Participation and returns in rural nonfarm activities: evidence from the Kyrgyz Republic," Agricultural Economics, International Association of Agricultural Economists, vol. 43(4), pages 459-471, July.
    8. François Bourguignon & Martin Fournier & Marc Gurgand, 2007. "Selection Bias Corrections Based On The Multinomial Logit Model: Monte Carlo Comparisons," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 174-205, February.
    9. Haggblade, Steven & Hazell, Peter & Reardon, Thomas, 2010. "The Rural Non-farm Economy: Prospects for Growth and Poverty Reduction," World Development, Elsevier, vol. 38(10), pages 1429-1441, October.
    10. Ferreira, Francisco H. G. & Lanjouw, Peter, 2001. "Rural Nonfarm Activities and Poverty in the Brazilian Northeast," World Development, Elsevier, vol. 29(3), pages 509-528, March.
    11. Jonasson, Erik & Helfand, Steven M., 2010. "How Important are Locational Characteristics for Rural Non-agricultural Employment? Lessons from Brazil," World Development, Elsevier, vol. 38(5), pages 727-741, May.
    12. North, Liisa L. & Cameron, John D., 2000. "Grassroots-Based Rural Development Strategies: Ecuador in Comparative Perspective," World Development, Elsevier, vol. 28(10), pages 1751-1766, October.
    13. 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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    More about this item

    Keywords

    EMPLEO RURAL; INGRESOS; ZONAS RURALES; ANALISIS MATEMATICO; MODELOS ECONOMETRICOS; RURAL EMPLOYMENT; INCOME; RURAL AREAS; MATHEMATICAL ANALYSIS; ECONOMETRIC MODELS;

    JEL classification:

    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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