Rural income diversification in Ethiopia: Patterns, trends, and welfare impacts
Increased diversification of rural households into the rural non-farm economy is an important driver of economic growth and structural transformation in countries like Ethiopia where most people live in rural areas and are largely dependent on seasonal agriculture. In this study, we explore the patt...
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| Format: | Brief |
| Language: | Inglés |
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International Food Policy Research Institute
2022
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/140882 |
| _version_ | 1855524848638361600 |
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| author | Abate, Gashaw T. Bachewe, Fantu Nisrane Regassa, Mekdim D. Minot, Nicholas |
| author_browse | Abate, Gashaw T. Bachewe, Fantu Nisrane Minot, Nicholas Regassa, Mekdim D. |
| author_facet | Abate, Gashaw T. Bachewe, Fantu Nisrane Regassa, Mekdim D. Minot, Nicholas |
| author_sort | Abate, Gashaw T. |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Increased diversification of rural households into the rural non-farm economy is an important driver of economic growth and structural transformation in countries like Ethiopia where most people live in rural areas and are largely dependent on seasonal agriculture. In this study, we explore the patterns and trends of diversification and assess its drivers and welfare effects during the recent decade (2012 – 2019) using three rounds of representative household data collected from four major regions in Ethiopia. Our results show that sample households generally adopt a livelihood strategy dominated by farming and that the level of diversification has been stagnant over the period of analysis considered. More importantly, most households continue to draw a substantial share of their income from crop production, followed by livestock. The income from non-farm activities accounts only between 17-23% of the total household income. Upon exploring the link between diversification and welfare outcomes, we find that households with relatively diversified income sources have significantly higher consumption expenditure per capita, consume diverse diets, and live in house with better roof quality. Further analyses reveal that income diversification is positively associated with credit access, membership in social insurance, ownership of assets and wealth, and population density. Conversely, access to relatively large, fertile, and irrigable land discourages diversification. In sum, the results imply the need for a deliberate effort to expand the non-farm economy to tap its full potential for employment generation, income growth, and overall welfare improvements. |
| format | Brief |
| id | CGSpace140882 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2022 |
| publishDateRange | 2022 |
| publishDateSort | 2022 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1408822025-11-06T06:10:43Z Rural income diversification in Ethiopia: Patterns, trends, and welfare impacts Abate, Gashaw T. Bachewe, Fantu Nisrane Regassa, Mekdim D. Minot, Nicholas income rural communities housing consumption households welfare welfare economics farmland agriculture crop production population density economic diversification assets social security livestock diet quality credit trends Increased diversification of rural households into the rural non-farm economy is an important driver of economic growth and structural transformation in countries like Ethiopia where most people live in rural areas and are largely dependent on seasonal agriculture. In this study, we explore the patterns and trends of diversification and assess its drivers and welfare effects during the recent decade (2012 – 2019) using three rounds of representative household data collected from four major regions in Ethiopia. Our results show that sample households generally adopt a livelihood strategy dominated by farming and that the level of diversification has been stagnant over the period of analysis considered. More importantly, most households continue to draw a substantial share of their income from crop production, followed by livestock. The income from non-farm activities accounts only between 17-23% of the total household income. Upon exploring the link between diversification and welfare outcomes, we find that households with relatively diversified income sources have significantly higher consumption expenditure per capita, consume diverse diets, and live in house with better roof quality. Further analyses reveal that income diversification is positively associated with credit access, membership in social insurance, ownership of assets and wealth, and population density. Conversely, access to relatively large, fertile, and irrigable land discourages diversification. In sum, the results imply the need for a deliberate effort to expand the non-farm economy to tap its full potential for employment generation, income growth, and overall welfare improvements. 2022-12-02 2024-04-12T13:36:49Z 2024-04-12T13:36:49Z Brief https://hdl.handle.net/10568/140882 en https://doi.org/10.1016/j.foodpol.2025.102978 Open Access application/pdf International Food Policy Research Institute Abate, Gashaw Tadesse; Bachewe, Fantu Nisrane; Regassa, Mekdim; and Minot, Nicholas. 2022. Rural income diversification in Ethiopia: Patterns, trends, and welfare impacts. IFPRI Project Note October 2022. Washington, DC: International Food Policy Research Institute (IFPRI). https://doi.org/10.2499/p15738coll2.136460. |
| spellingShingle | income rural communities housing consumption households welfare welfare economics farmland agriculture crop production population density economic diversification assets social security livestock diet quality credit trends Abate, Gashaw T. Bachewe, Fantu Nisrane Regassa, Mekdim D. Minot, Nicholas Rural income diversification in Ethiopia: Patterns, trends, and welfare impacts |
| title | Rural income diversification in Ethiopia: Patterns, trends, and welfare impacts |
| title_full | Rural income diversification in Ethiopia: Patterns, trends, and welfare impacts |
| title_fullStr | Rural income diversification in Ethiopia: Patterns, trends, and welfare impacts |
| title_full_unstemmed | Rural income diversification in Ethiopia: Patterns, trends, and welfare impacts |
| title_short | Rural income diversification in Ethiopia: Patterns, trends, and welfare impacts |
| title_sort | rural income diversification in ethiopia patterns trends and welfare impacts |
| topic | income rural communities housing consumption households welfare welfare economics farmland agriculture crop production population density economic diversification assets social security livestock diet quality credit trends |
| url | https://hdl.handle.net/10568/140882 |
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