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The Contribution of Education To Farm And Off-Farm Income In Rural Households of Ethiopia

Abstract: 

This study analyses the impact of education on farm and off‐ farm income of rural households in Ethiopia. The study is conducted to analyze how education of the household affects the labor allocation and hence the income of the rural households. A farm household model is constructed to see how farm households allocate their time to farm and off‐farm activities. Labor supply decisions of farm household members are viewed as the result of household utility maximization subject to constraints on human time, income, and farm production. The Seventh round Ethiopian Rural Household Survey data, collected by the School of Economics, Addis Ababa University, in collaboration with Ethiopian Development Research Institute, International Food Policy Research Institute and the Center for the study of African Economics, University of Oxford is used in the study. The labor allocation of the households to farm and off‐ farm activities is affected by average education of the household. The household head’s education alone also affects labor allocation. As the households get more education, they reduce labor supply to farms and increase it to off‐farm wage employment. The effect of education goes beyond determining labor allocation; it also affects farm and off‐‐farm income. Even though education reduces labor allocation to farm, its overall effect on farm income is positive. This finding suggests that expanding education in rural area increases farm income, though it reduces farm labor supply. Therefore, expansion of education in rural Ethiopia is important to improve farm income and alleviate poverty. 

Corporate Author: 
Getnet Alemu, Worku Gebeyehu & Demirew Getachew (Editors) & Ethiopian Economic Association (EEA)
Publisher: 
Ethiopian Economic Association (EEA)
ISBN/ISSN: 
978-99944-54-37-2
Primary Descriptors: 

Income, Rural Household

Secondary Descriptor: 

Education - rural Household

Geographic Descriptors: 
Ethiopia
Cataloge Date: 
03/13/2015
Broad Subject heading: 
Agriculture - Farm - Ethiopia
Call Number: 
330.963 PRO 2014
Serial Key Title: 
Proceedings of the Eleventh International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Volume: 
I
Publication date: 
2014-06-02 00:00:00
Forum or Discussion date: 
2013-07-17 00:00:00
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Book
Current frequency: 
Annually