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The returns to participation in the non-farm sector in rural Rwanda

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  • Dabalen, Andrew
  • Paternostro, Stefano
  • Pierre, Gaelle

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.

Suggested Citation

  • Dabalen, Andrew & Paternostro, Stefano & Pierre, Gaelle, 2004. "The returns to participation in the non-farm sector in rural Rwanda," Policy Research Working Paper Series 3462, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3462
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    Cited by:

    1. World Bank, 2008. "Improving the Management of Secondary and Tertiary Roads in the South East Europe Countries," World Bank Publications - Reports 7786, The World Bank Group.
    2. Pavel Ciaian & Jan Fałkowski & D’Artis Kancs, 2012. "Productivity and credit constraints: A firm-level propensity score evidence for agricultural farms in central and east European countries," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 62(4), pages 459-487, December.
    3. Birthal, Pratap Singh & Negi, Digvijay S. & Jha, Awadesh K. & Singh, Dhiraj, 2014. "Income Sources of Farm Households in India: Determinants, Distributional Consequences and Policy Implications," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 27(01).
    4. Essama-Nssah, B., 2006. "Propensity score matching and policy impact analysis - a demonstration in EViews," Policy Research Working Paper Series 3877, The World Bank.
    5. Chandra, Vandana & Li, Ying & Osorio Rodarte, Israel, 2007. "Commodity Export Diversification in Rwanda - Many Export Discoveries with Little Scaling-Up," MPRA Paper 18556, University Library of Munich, Germany.
    6. Diop, Ndiame & Brenton, Paul & Asarkaya, Yakup, 2005. "Trade costs, export development, and poverty in Rwanda," Policy Research Working Paper Series 3784, The World Bank.
    7. Ciaian, Pavel & Fa?kowski, Jan & d’Artis, Kanc & Pokrivcak, Jan, 2011. "Productivity and Credit Constraints: Firm-Level Evidence from Propensity Score Matching," Factor Markets Working Papers 99, Centre for European Policy Studies.
    8. World Bank, 2007. "Rwanda : Toward Sustained Growth and Competitiveness, Volume 2. Main Report," World Bank Publications - Reports 7702, The World Bank Group.
    9. Olper, Alessandro & Falkowski, Jan & Swinnen, Johan F.M., 2009. "Democracy and Agricultural Protection: Parametric and Semi-parametric Matching Estimates," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49313, Agricultural and Applied Economics Association.
    10. Verpoorten, Marijke, 2009. "Household coping in war- and peacetime: Cattle sales in Rwanda, 1991-2001," Journal of Development Economics, Elsevier, vol. 88(1), pages 67-86, January.
    11. World Bank, 2008. "Improving the Management of Secondary and Tertiary Roads in the South East Europe Countries," World Bank Publications - Reports 6213, The World Bank Group.
    12. Meena, P.C. & Kumar, Ranjit & Sivaramane, N. & Kumar, Sanjiv & Srinivas, K. & Dhandapani, A. & Khan, Elias, 2017. "Non-Farm Income as an Instrument for Doubling Farmers’ Income: Evidences from Longitudinal Household Survey," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 30(Conferenc).
    13. Jan Fałkowski & Pavel Ciaian & d'Artis Kancs, 2009. "Access to Credit, Factor Allocation and Farm Productivity: Evidence From the CEE Transition Economies," Working Papers 2009-12, Faculty of Economic Sciences, University of Warsaw.

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