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Nonfarm income and rural labor markets

In: Ethiopia's agrifood system: Past trends, present challenges, and future scenarios

Author

Listed:
  • Bachewe, Fantu Nisrane
  • Berhane, Guush
  • Minten, Bart
  • Taffesse, Alemayehu Seyoum

Abstract

The third part of the book presents “Economywide Perspectives†on the future of Ethiopian agriculture. Chapter 11, “Nonfarm Income and Rural Labor Markets,†examines how the rapid transformation in Ethiopia’s economy is affecting off-farm income and labor markets in rural areas.13 Data from a large-scale household survey in high potential agricultural areas show that total off-farm income (defined as wage and enterprise income) makes up 18 percent of total rural household income. The shares of off-farm income and wage income are even larger for the poor and for female- and youth-headed households. Moreover, given strong growth in agriculture and the overall Ethiopian economy, real rural wages have increased by 54 percent since 2006. While this wage increase is good news for the poor, it also induces adjustments in agricultural production practices, including increased adoption of labor-substituting technologies such as herbicides and mechanization. Higher wages and incomes relax liquidity constraints in the off-season for some households, also contributing to higher productivity.

Suggested Citation

  • Bachewe, Fantu Nisrane & Berhane, Guush & Minten, Bart & Taffesse, Alemayehu Seyoum, 2020. "Nonfarm income and rural labor markets," IFPRI book chapters, in: Ethiopia's agrifood system: Past trends, present challenges, and future scenarios, chapter 11, pages 343-377, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifpric:9780896296916_11
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    Cited by:

    1. Abate, Gashaw T. & Bachewe, Fantu N. & Regassa, Mekdim D., 2021. "Rural Income Diversification in Ethiopia: Patterns, Trends, and Welfare Impacts," 2021 Conference, August 17-31, 2021, Virtual 315315, International Association of Agricultural Economists.
    2. Jim Woodhill & Avinash Kishore & Jemimah Njuki & Kristal Jones & Saher Hasnain, 2022. "Food systems and rural wellbeing: challenges and opportunities," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(5), pages 1099-1121, October.

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