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Off-Farm Employment and Income inequality: the implication for poverty reduction strategy

Abstract: 

Using micro data collected from a sample of households in Tigray, northern Ethiopia, the contributions of farm and off-farm income sources to the overall income inequality is assessed. Some interesting results are obtained. Due to entry barriers, relatively wealthy arm households dominate the most lucrative rural non-farm activities such as non-farm skilled wage work and non-farm self-employment. The present public work program is unequally distributed but it favours the poor and hence reduces the income inequality that exists in the rural areas. Therefore, policy reform is required to handle the redistribution effect of expanding economic activities in order to reduce the income inequality effect of diversifying income sources into non-farm activities, the underlying factors that hinder participation in non-farm activities such as credit constraints and lack of skill may have to be eliminated through the provision of credit and technical training for the poor. Public provision of information on the lab our market could be helpful to reduce the transaction cost of searching for non-farm jobs. Improving rural infrastructure can also reduce spatial income inequality. Most of the recommendations can fit quite well to the activities of TDA, REST and DECOL, which are involved in providing credit and training to farmers in non-farm activities in the region

Corporate Author: 
Gebrehiwot Ageba, Jemal Mohammed and Solomon Tesfay (Editors) , Ethiopian Economic Association(EEA) , Department of Economics of AAU & Fredrich Ebert Stifung
Publisher: 
Ethiopian Economic Association (EEA)
Primary Descriptors: 

income diversification; income inequality

Secondary Descriptor: 

entry barrier; policy reform

Geographic Descriptors: 
Ethiopia
Cataloge Date: 
02/27/2013
Broad Subject heading: 
Income
Call Number: 
338.963 PRO 2002
Serial Key Title: 
Proceedings of the Eleventh Annual conference on the Ethiopian economy
Publication catagory: 
Content type: 
Publication date: 
2013-12-27 23:16:00
Forum or Discussion date: 
2013-02-27 15:58:24
Conference Place: 
Nov. 2-4, 2001, Nazareth, Ethiopia
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Book
Current frequency: 
Annualy
Thematic area: 
Policy Reform, Implementation and outcome in Ethiopia