The Returns to Participation in the Nonfarm Sector in Rural Rwanda

33 Pages Posted: 4 Jan 2005

See all articles by Andrew Dabalen

Andrew Dabalen

World Bank - Africa

Stefano Paternostro

World Bank - Poverty Reduction Group (PRMPR)

Gaëlle Pierre

World Bank

Date Written: December 2004

Abstract

In this paper, we investigate the differences in outcomes (earnings and consumption) between individuals (households) who participate in the non-farm sector and those who do not. We use propensity score matching methods, where we create appropriate comparison groups of individuals and households. First we find that non-farm self-employed individuals in rural Rwanda have significantly higher earnings than farm workers and non-farm formal employees. Second, we show that the benefits to non-farm self-employment are much higher among the non-poor than among the poor. Third, we show that diversified households, those with a farm and a non-farm enterprise, are less likely to be poor. Finally, farm households who do not participate in the market have significantly lower consumption levels than households that do. However, the benefits to market participation appear to matter less for the poor than for the non-poor. We find little difference in expenditures between market participants and non-market participants, for comparable households in the bottom 40% of the expenditure distribution.

Keywords: The Returns to Participation in the Nonfarm Sector in Rural Rwanda

Suggested Citation

Dabalen, Andrew and Paternostro, Stefano and Pierre, Gaëlle, The Returns to Participation in the Nonfarm Sector in Rural Rwanda (December 2004). Available at SSRN: https://ssrn.com/abstract=643193

Andrew Dabalen (Contact Author)

World Bank - Africa ( email )

1818 H Street
Washington, DC 20433
United States

Stefano Paternostro

World Bank - Poverty Reduction Group (PRMPR) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-3492 (Phone)
202-473-8466 (Fax)

Gaëlle Pierre

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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