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Does the Nonfarm Economy Offer Pathways for Upward Mobility? Evidence from a Panel Data Study in Ethiopia

Sosina Bezu (), Christopher Barrett () and Stein Holden ()

World Development, 2012, vol. 40, issue 8, 1634-1646

Abstract: Empirical studies across many developing countries routinely document a positive correlation between participation in rural nonfarm employment and households’ wealth or income. This paper explores whether nonfarm employment leads to higher consumption expenditure growth in Ethiopia. We find that: (1) households’ consumption expenditure growth is positively correlated with the initial share of nonfarm income; (2) the growth elasticity of nonfarm income share is higher for wealthier households; and (3) the main source of growth for nonfarm participants comes from the higher rates of return participants enjoy on their human and physical capital.

Keywords: rural nonfarm; income dynamics; income diversification; Africa; Ethiopia; impact (search for similar items in EconPapers)
Date: 2012
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Working Paper: Does the nonfarm economy offer pathways for upward mobility? Evidence from a panel data study in Ethiopia (2011) Downloads
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