Professor Johan KlaessonMartha Kibru Melese2023-12-192023-12-192023-05-08http://etd.aau.edu.et/handle/123456789/1084The aim of this paper is to identify factors influencing labor allocation decisions of adult members of farm households in rural Ethiopia. The analysis is done both at the extensive and intensive margins using a Two-Parts Model (TPM) based on data pooled from the first three waves of the Ethiopian Rural Socio-economic Surveys (ERSS). The results show that labor allocation is influenced by both incentive (pull/push factors) and capacity factors such as education, land size, livestock holdings and non-labor income. Besides, the results suggest gender disparity in the allocation of labor to non-agricultural activities in rural Ethiopia. Female members of farm households are more likely to participate in non-agricultural works, and when they do, they also work more hours than male members. Also, gender differences are observed in some factors that affect labor allocation decisions such as education, number of infants in a household and non-labor income. Therefore, policies that aim at improving efficiency of labor allocation in rural areas should take into consideration differences in responses to various factors that affect decisions of male and female members of farm households.enTime allocation, Non-agricultural activities, Two-Parts Model, Rural Ethiopia JEL Codes: D13, J22, Q12Thesis