Does Non-Farm Income Increase Farm-Household Income Inequality? Evidence from Three Continents
This paper performs inequality decomposition by income sources using data from three different continents, using a unified inequality decomposition approach. Household survey data from Ethiopia, Georgia and Korea are used for this purpose, and the uniform result is that non-farm labor income is an equalizing source of income, in the sense that increasing non-farm labor income by 1% uniformly results in a lower Gini index of inequality. These results shed light on the processes that affect farm-household inequality under various geographical, economic and institutional conditions, and imply that policy directed towards non-farm income sources could not only raise rural incomes on average but also potentially reduce inequality, i.e., be pro-poor.
|Date of creation:||2009|
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- Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
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- Leones, J P & Feldman, S, 1998. "Nonfarm Activity and Rural Household Income: Evidence from Philippine Microdata," Economic Development and Cultural Change, University of Chicago Press, vol. 46(4), pages 789-806, July.
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