Rural Livelihood Strategy Segments and Dynamics in Ethiopia: Evidence from Panel Household Survey
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Date
2020-10
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Addis Ababa University
Abstract
Rural households are heterogeneous: different socio-economic features and asset endowments of households determine their engagement in various livelihood activities resulting in different livelihood outcomes interims of income. Poverty reduction policies, wellbeing improvement, or households’ welfare policy should consider this. The study aims to detect the classification of rural livelihood strategies, investigates the interactions between livelihood strategies and outcomes, livelihood strategies transitions, and Captures the dynamics and underlying factors of long-term changes. Using Ethiopian Socio-Economic survey (ESS) three-wave panel dataset of 2011, 2013, and 2015 years based on 3639 households from the entire country, the study employed two-part model that combines households’ assets and income in order to identify different livelihoods strategy clusters and regression estimation to uncover the determinants of livelihood choices and mobility Based on a Latent Markov Model, the study identifies nine distinct livelihood strategies and analyses households’ movements between strategies through time. The study results show that over 42.2% of households change livelihood strategies between 2011 and 2015 year. A common pathway to improve household wellbeing is an intermediate step, in which household’s accumulated assets and capital through farming, Livestock rearing, self employment, wage, and migratory work and Very few households have moved directly from the least to the most remunerative strategy. The study identifies covariates that influence the choices of livelihood strategies and affect the access of households to more remunerative strategies., for instance household adults’ size, ownership of physical assets, and access to financial resources. Compared to both the asset and income method, the applied approach of combining income and assets better distinguishes the identified livelihood. These findings Indicted policy implications for improving the livelihood choices range to lower-income groups to enhance their livelihoods.
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“the combined asset and income approach”, two-part model, latent Markov model, dynamics livelihood strategies