Non-Farm Income and Inequality by use of Gin Decomposability Technique: A Case Study in Rural Tigray.
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Date
2007-02
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A.A.U
Abstract
The study viewed the impact of non- fann income on income inequality m rural Tigray by
decomposing the rural households income in to fann mcome, non- farm income, remittance,
rental income and other incomes,
As a method of data analysis, the study used Gini- decomposability technique and Probit
regresslOn,
The result indicated non- fann income particularly of wage employment as inequality reducing
income source; implying the greater importance of wage employment sources to rural poor
households than rural rich households, The study result has also indicated Age (elders) of an
individual, Illiteracy, Primary and Secondary education and Distance to transport facility
(individuals at fmihest distance) positively related to the probability of being non- fann self
employed while Gender (being female) and Marital status negatively related, The result also
explained, though education required in some self employment activities, illiterates have higher
participation because the majority of these activities were found marginalized/ inferior,
generating lower income and did not attract educated,
Therefore, in order to minimize the existing income gap in rural Tigray Govemment should
design appropriate policy and programs such as investment policy and productive safety net
programs in the area so that rural poor households wi ll be benefited from employment. Moreover,
Goverrunent should work on modemizing the traditional self employment activities so as to
increase their eamed income and also promote migration to increase remittance
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Keywords
Farm income and inequality, Gin decomposability, study in rural Tigray