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Poverty and the rural nonfarm economy in Oromia, Ethiopia
Author(s) -
Van Den Berg Marrit,
Kumbi Girma Earo
Publication year - 2006
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2006.00192.x
Subject(s) - nonfarm payrolls , economics , poverty , inequality , economic inequality , development economics , demographic economics , labour economics , economic growth , agriculture , geography , mathematics , mathematical analysis , archaeology
The rural nonfarm sector has gained increasing importance not only in Asia but also in Africa. It is, however, widely believed that in most parts of Africa, the growth of the nonfarm economy has increased inequality and has had a limited effect on the poor, who face entry barriers to nonfarm activities. The present article analyzes the relation between nonfarm income, poverty, and inequality in Oromia, Ethiopia. We use two complementary methodologies: (i) econometric estimates of household income from the nonfarm sector; and (ii) a Gini decomposition of analysis income inequality by source. The results consistently indicate that in Oromia entry barriers to nonfarm activities is low, and the general growth of the sector will benefit the poor.