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Employment dynamics in the rural nonfarm sector in Ethiopia Do the poor have time on their side?

  • Bezu, Sosina
  • Barrett, Christopher B.

We study rural employment transitions in Ethiopia between farming and both low- and high-return nonfarm employment. We find that initial asset holdings and access to saving and credit are important factors for transition into high-return rural nonfarm employment and that households’ participation in high-return rural nonfarm activities is robust to their experience of health shocks. However, shocks that affect their wealth or liquidity may trigger descents into low-return nonfarm employment. On the other hand, shocks that reduce agricultural income motivate transitions into high-return rural nonfarm employment.

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File URL: http://mpra.ub.uni-muenchen.de/35756/1/MPRA_paper_35756.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 35756.

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Date of creation: 2010
Date of revision: 2011
Handle: RePEc:pra:mprapa:35756
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  1. 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.
  2. 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.
  3. Dunn, Thomas & Holtz-Eakin, Douglas, 2000. "Financial Capital, Human Capital, and the Transition to Self-Employment: Evidence from Intergenerational Links," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 282-305, April.
  4. Corral, Leonardo & Reardon, Thomas, 2001. "Rural Nonfarm Incomes in Nicaragua," World Development, Elsevier, vol. 29(3), pages 427-442, March.
  5. Pramila Krishnan & Stefan Dercon, 1995. "Income portfolios in rural Ethiopia and Tanzania: choices and constraints," CSAE Working Paper Series 1995-12, Centre for the Study of African Economies, University of Oxford.
  6. Fairlie, Robert, 2014. "The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment," Santa Cruz Department of Economics, Working Paper Series qt49c4n0fg, Department of Economics, UC Santa Cruz.
  7. Carrasco, R., 1997. "Transitions to and from Self-Employment in Spain: An Empirical Analysis," Papers 9710, Centro de Estudios Monetarios Y Financieros-.
  8. Janvry, Alain de & Sadoulet, Elisabeth, 2001. "Income Strategies Among Rural Households in Mexico: The Role of Off-farm Activities," World Development, Elsevier, vol. 29(3), pages 467-480, March.
  9. Mead, Donald C. & Liedholm, Carl, 1998. "The dynamics of micro and small enterprises in developing countries," World Development, Elsevier, vol. 26(1), pages 61-74, January.
  10. Block, S. & Webb, P., 2001. "The dynamics of livelihood diversification in post-famine Ethiopia," Food Policy, Elsevier, vol. 26(4), pages 333-350, August.
  11. Bruce, Donald, 2000. "Effects of the United States tax system on transitions into self-employment," Labour Economics, Elsevier, vol. 7(5), pages 545-574, September.
  12. Thomas Reardon & J. Edward Taylor & Kostas Stamoulis & Peter Lanjouw & Arsenio Balisacan, 2000. "Effects of Non-Farm Employment on Rural Income Inequality in Developing Countries: An Investment Perspective," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 266-288.
  13. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
  14. Mandelman, Federico S. & Montes-Rojas, Gabriel V., 2009. "Is Self-employment and Micro-entrepreneurship a Desired Outcome?," World Development, Elsevier, vol. 37(12), pages 1914-1925, December.
  15. Tomoya Matsumoto & Yoko Kijima & Takashi Yamano, 2006. "The role of local nonfarm activities and migration in reducing poverty: evidence from Ethiopia, Kenya, and Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 35(s3), pages 449-458, November.
  16. Nigar Nargis & Mahabub Hossain, 2006. "Income dynamics and pathways out of rural poverty in Bangladesh, 1988-2004," Agricultural Economics, International Association of Agricultural Economists, vol. 35(s3), pages 425-435, November.
  17. 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.
  18. Thomas Dunn & Douglas Holtz-Eakin, 1996. "Financial Capital, Human Capital, and the Transition to Self-Employment:Evidence from Intergenerational Links," NBER Working Papers 5622, National Bureau of Economic Research, Inc.
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