Journal of
Development and Agricultural Economics

  • Abbreviation: J. Dev. Agric. Econ.
  • Language: English
  • ISSN: 2006-9774
  • DOI: 10.5897/JDAE
  • Start Year: 2009
  • Published Articles: 443

Full Length Research Paper

The role of the rural labor market in reducing poverty in Western Ethiopia

Amsalu Bedemo
  • Amsalu Bedemo
  • Department of Economics, Faculty of Business and Economics, Assosa University, P. O. Box 018, Assosa, Ethiopia.
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Kindie Getnet
  • Kindie Getnet
  • International Water Management Institute (IWMI), P. O. Box, 5689, Addis Ababa, Ethiopia.
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Belay Kassa
  • Belay Kassa
  • School of Agricultural Economics and Agribusiness, Haramaya University, P. O. Box 138, Ethiopia.
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S. P. R. Chaurasia
  • S. P. R. Chaurasia
  • School of Agricultural Economics and Agribusiness, Haramaya University, P. O. Box 138, Ethiopia.
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  •  Received: 10 September 2013
  •  Accepted: 27 January 2014
  •  Published: 01 July 2014

Abstract

This study examines the role of the rural labor market in reducing poverty and improving the well-being of smallholder farmers in rural Ethiopia. Propensity score matching technique is used to estimate the effect of labor market participation on poverty, consumption expenditure and income of smallholder farmers. The overall result indicates that the rural labor market contributes significantly to income growth, consumption expenditure and poverty reduction among smallholder farmers. Particularly, participation in off-farm wage activity has a positive and significant effect on household consumption expenditure and income but a negative and significant effect on the likelihood of a household being poor.

 

Key words: Poverty, rural, labor market, household, smallholder, propensity score.