IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/3462.html
   My bibliography  Save this paper

The returns to participation in the non-farm sector in rural Rwanda

Author

Listed:
  • Dabalen, Andrew
  • Paternostro, Stefano
  • Pierre, Gaelle

Abstract

In this paper, we investigate the differences in outcomes (earnings and consumption) between individuals (households) who participate in the non-farm sector and those who do not. We use propensity score matching methods, where we create appropriate comparison groups of individuals and households. First we find that non-farm self-employed individuals in rural Rwanda have significantly higher earnings than farm workers and non-farm formal employees. Second, we show that the benefits to non-farm self-employment are much higher among the non-poor than among the poor. Third, we show that diversified households, those with a farm and a non-farm enterprise, are less likely to be poor. Finally, farm households who do not participate in the market have significantly lower consumption levels than households that do. However, the benefits to market participation appear to matter less for the poor than for the non-poor. We find little difference in expenditures between market participants and non-market participants, for comparable households in the bottom 40% of the expenditure distribution.

Suggested Citation

  • Dabalen, Andrew & Paternostro, Stefano & Pierre, Gaelle, 2004. "The returns to participation in the non-farm sector in rural Rwanda," Policy Research Working Paper Series 3462, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3462
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2005/02/24/000112742_20050224150254/Rendered/PDF/wps3462.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
    3. Vijverberg, P.M., 1992. "Measuring Income from Family Enterprises with Household Surveys," Papers 84, World Bank - Living Standards Measurement.
    4. Rajeev H. Dehejia & Sadek Wahba, 1998. "Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs," NBER Working Papers 6586, National Bureau of Economic Research, Inc.
    5. Barrett, C. B. & Reardon, T. & Webb, P., 2001. "Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications," Food Policy, Elsevier, vol. 26(4), pages 315-331, August.
    6. Ahituv, Avner & Kimhi, Ayal, 2002. "Off-farm work and capital accumulation decisions of farmers over the life-cycle: the role of heterogeneity and state dependence," Journal of Development Economics, Elsevier, vol. 68(2), pages 329-353, August.
    7. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. World Bank, 2008. "Improving the Management of Secondary and Tertiary Roads in the South East Europe Countries," World Bank Publications - Reports 7786, The World Bank Group.
    2. Verpoorten, Marijke, 2009. "Household coping in war- and peacetime: Cattle sales in Rwanda, 1991-2001," Journal of Development Economics, Elsevier, vol. 88(1), pages 67-86, January.
    3. Pavel Ciaian & Jan Fałkowski & D’Artis Kancs, 2012. "Productivity and credit constraints: A firm-level propensity score evidence for agricultural farms in central and east European countries," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 62(4), pages 459-487, December.
    4. Birthal, Pratap Singh & Negi, Digvijay S. & Jha, Awadesh K. & Singh, Dhiraj, 2014. "Income Sources of Farm Households in India: Determinants, Distributional Consequences and Policy Implications," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 27(1).
    5. Essama-Nssah, B., 2006. "Propensity score matching and policy impact analysis - a demonstration in EViews," Policy Research Working Paper Series 3877, The World Bank.
    6. Chandra, Vandana & Li, Ying & Osorio Rodarte, Israel, 2007. "Commodity Export Diversification in Rwanda - Many Export Discoveries with Little Scaling-Up," MPRA Paper 18556, University Library of Munich, Germany.
    7. Diop, Ndiame & Brenton, Paul & Asarkaya, Yakup, 2005. "Trade costs, export development, and poverty in Rwanda," Policy Research Working Paper Series 3784, The World Bank.
    8. Meena, P.C. & Kumar, Ranjit & Sivaramane, N. & Kumar, Sanjiv & Srinivas, K. & Dhandapani, A. & Khan, Elias, 2017. "Non-Farm Income as an Instrument for Doubling Farmers’ Income: Evidences from Longitudinal Household Survey," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 30(Conferenc).
    9. Jan Fałkowski & Pavel Ciaian & d'Artis Kancs, 2009. "Access to Credit, Factor Allocation and Farm Productivity: Evidence From the CEE Transition Economies," Working Papers 2009-12, Faculty of Economic Sciences, University of Warsaw.
    10. Ciaian, Pavel & Fa?kowski, Jan & d’Artis, Kanc & Pokrivcak, Jan, 2011. "Productivity and Credit Constraints: Firm-Level Evidence from Propensity Score Matching," Factor Markets Working Papers 99, Centre for European Policy Studies.
    11. World Bank, 2007. "Rwanda : Toward Sustained Growth and Competitiveness, Volume 2. Main Report," World Bank Publications - Reports 7702, The World Bank Group.
    12. Olper, Alessandro & Falkowski, Jan & Swinnen, Johan F.M., 2009. "Democracy and Agricultural Protection: Parametric and Semi-parametric Matching Estimates," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49313, Agricultural and Applied Economics Association.
    13. World Bank, 2008. "Improving the Management of Secondary and Tertiary Roads in the South East Europe Countries," World Bank Publications - Reports 6213, The World Bank Group.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mamoudou Ba & Amar Anwar & Mazhar Mughal, 2021. "Non‐farm employment and poverty reduction in Mauritania," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(3), pages 490-514, April.
    2. Mathenge, Mary K. & Tschirley, David L., 2008. "Off-Farm Work and Farm Production Decisions: Evidence from Maize-Producing Households in Rural Kenya," Working Papers 202609, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
    3. Ahmed, Mansur & Goodwin, Barry, "undated". "Agricultural Mechanization and Non-Farm Labor Supply of Farm Households: Evidence from Bangladesh," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236131, Agricultural and Applied Economics Association.
    4. Benjamin Tetteh Anang, 2017. "Effect of non-farm work on agricultural productivity: Empirical evidence from northern Ghana," WIDER Working Paper Series wp-2017-38, World Institute for Development Economic Research (UNU-WIDER).
    5. 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).
    6. Andrea Pufahl & Christoph R. Weiss, 2009. "Evaluating the effects of farm programmes: results from propensity score matching," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(1), pages 79-101, March.
    7. Jan Fałkowski & Maciej Jakubowski & Paweł Strawiński, 2014. "Returns from income strategies in rural Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(1), pages 139-178, January.
    8. Almeida, Alexandre N. & Bravo-Ureta, Boris E., 2019. "Agricultural productivity, shadow wages and off-farm labor decisions in Nicaragua," Economic Systems, Elsevier, vol. 43(1), pages 99-110.
    9. Zeeshan & Geetilaxmi Mohapatra & Arun Kumar Giri, 2022. "How Farm Household Spends Their Non-farm Incomes in Rural India? Evidence from Longitudinal Data," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(4), pages 1967-1996, August.
    10. Miet Maertens & Liesbeth Colen & Johan F. M. Swinnen, 2011. "Globalisation and poverty in Senegal: a worst case scenario?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 38(1), pages 31-54, March.
    11. Van den Broeck, Goedele & Swinnen, Johan & Maertens, Miet, 2017. "Global value chains, large-scale farming, and poverty: Long-term effects in Senegal," Food Policy, Elsevier, vol. 66(C), pages 97-107.
    12. Nguyen, Huy, 2014. "The effect of land fragmentation on labor allocation and the economic diversity of farm households: The case of Vietnam," MPRA Paper 57521, University Library of Munich, Germany.
    13. Gitonga, Zachary M. & De Groote, Hugo & Kassie, Menale & Tefera, Tadele, 2013. "Impact of metal silos on households’ maize storage, storage losses and food security: An application of a propensity score matching," Food Policy, Elsevier, vol. 43(C), pages 44-55.
    14. Kiros Tsegay & Hongzhong Fan & AM Priyangani Adikari & Hailay Shifare, 2021. "Does gender matter for household livelihood diversification in Ethiopia rural areas?," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(6), pages 221-232, September.
    15. Drall, Anviksha & Mandal, Sabuj Kumar, 2021. "Investigating the existence of entry barriers in rural non-farm sector (RNFS) employment in India: A theoretical modelling and an empirical analysis," World Development, Elsevier, vol. 141(C).
    16. Nkechi S. Owoo & Wim Naudé, 2017. "Spatial proximity and firm performance: evidence from non-farm rural enterprises in Ethiopia and Nigeria," Regional Studies, Taylor & Francis Journals, vol. 51(5), pages 688-700, May.
    17. Riithi, Alexander Njuguna & Irungu, Patrick & Munei , Kimpei, 2015. "Determinants Of Choice Of Alternative Livelihood Diversification Strategies In Solio Resettlement Scheme, Kenya," Dissertations and Theses 269714, University of Nairobi, Department of Agricultural Economics.
    18. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    19. Peter Brummund & Joshua D. Merfeld, 2022. "Should farmers farm more? Comparing marginal products within Malawian households," Agricultural Economics, International Association of Agricultural Economists, vol. 53(2), pages 289-306, March.
    20. Khundi, Fydess & Jagger, Pamela & Shively, Gerald & Sserunkuuma, Dick, 2011. "Income, poverty and charcoal production in Uganda," Forest Policy and Economics, Elsevier, vol. 13(3), pages 199-205, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:3462. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.