Article ID Journal Published Year Pages File Type
988921 World Development 2012 13 Pages PDF
Abstract

SummaryEmpirical 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.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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