Nonfarm Income, Inequality, and Poverty in Rural Egypt and Jordan
The rural economy of developing countries has long been regarded as synonymous with agriculture but in recent years this view has begun to change. Such diverse activities as government, commerce, and services are now seen as providing most income i...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/03/1047507/nonfarm-income-inequality-poverty-rural-egypt-jordan http://hdl.handle.net/10986/19687 |
| id |
okr-10986-19687 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AVERAGE INCOME BARLEY DATA SET DATA SETS DECOMPOSITION ANALYSIS DECOMPOSITION RESULTS DECOMPOSITION TECHNIQUES DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPING WORLD DIVIDENDS ECONOMIC PERFORMANCE EMPIRICAL LITERATURE EXPENDITURES EXPLANATORY VARIABLES FACTOR INCOME GINI COEFFICIENT GROSS INCOME HIGH CONCENTRATION HOUSEHOLD CONSUMPTION HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD MEMBERS HOUSEHOLD SIZE HOUSEHOLD SURVEYS IMPORTS INCOME INCOME INCOME DISTRIBUTION INCOME EQUATION INCOME INEQUALITY INCOME LEVELS INCOME SHARE INCOME SOURCE INCOME SOURCES INCOMES INEQUALITY INEQUALITY DECOMPOSITION INEQUALITY MEASURE LAND OWNERSHIP MEAN VALUE MEASUREMENT PROBLEMS MIDDLE CLASS NEGATIVE EFFECT NEGATIVE IMPACT NONFARM INCOME PER CAPITA INCOME POLICY ANALYSIS POLICY RESEARCH POOR POSITIVE EFFECT POSITIVE IMPACT POVERTY REDUCTION PRIVATE SECTOR PRIVATE SECTOR EMPLOYMENT PRIVATE TRANSFERS PUBLIC SECTOR REGRESSION ANALYSIS REGRESSION RESULTS RELATIVE IMPORTANCE SAVINGS SECURITIES SOCIAL SAFETY WAGE RATES WAGES |
| spellingShingle |
AVERAGE INCOME BARLEY DATA SET DATA SETS DECOMPOSITION ANALYSIS DECOMPOSITION RESULTS DECOMPOSITION TECHNIQUES DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPING WORLD DIVIDENDS ECONOMIC PERFORMANCE EMPIRICAL LITERATURE EXPENDITURES EXPLANATORY VARIABLES FACTOR INCOME GINI COEFFICIENT GROSS INCOME HIGH CONCENTRATION HOUSEHOLD CONSUMPTION HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD MEMBERS HOUSEHOLD SIZE HOUSEHOLD SURVEYS IMPORTS INCOME INCOME INCOME DISTRIBUTION INCOME EQUATION INCOME INEQUALITY INCOME LEVELS INCOME SHARE INCOME SOURCE INCOME SOURCES INCOMES INEQUALITY INEQUALITY DECOMPOSITION INEQUALITY MEASURE LAND OWNERSHIP MEAN VALUE MEASUREMENT PROBLEMS MIDDLE CLASS NEGATIVE EFFECT NEGATIVE IMPACT NONFARM INCOME PER CAPITA INCOME POLICY ANALYSIS POLICY RESEARCH POOR POSITIVE EFFECT POSITIVE IMPACT POVERTY REDUCTION PRIVATE SECTOR PRIVATE SECTOR EMPLOYMENT PRIVATE TRANSFERS PUBLIC SECTOR REGRESSION ANALYSIS REGRESSION RESULTS RELATIVE IMPORTANCE SAVINGS SECURITIES SOCIAL SAFETY WAGE RATES WAGES Adams, Richard H. Nonfarm Income, Inequality, and Poverty in Rural Egypt and Jordan |
| geographic_facet |
Middle East and North Africa Egypt, Arab Republic of Jordan |
| relation |
Policy Research Working Paper;No. 2572 |
| description |
The rural economy of developing
countries has long been regarded as synonymous with
agriculture but in recent years this view has begun to
change. Such diverse activities as government, commerce, and
services are now seen as providing most income in rural
households. Applying decomposition analysis to two new
nationally representative sets of household data from Egypt
and Jordan, the author examines how different sources of
income--including nonfarm income--affect inequality in rural
income. He concludes: 1) Nonfarm income has different
impacts on poverty and inequality in the two countries. In
Egypt the poor (those in the lowest quintile) receive almost
60 percent of their per capita income from nonfarm income.
In Jordan the poor receive less than 20 percent of their
income from nonfarm income. So nonfarm income decreases
inequality in Egypt and increases it in Jordan. 2) Access to
land accounts for this difference between the two countries.
In Egypt the cultivated land base is totally irrigated and
very highly productive. Egypt's large rural population
seeks access to land but because the land-to-people ratio is
so unfavorable, only a minority of rural inhabitants
actually own land. The rest--especially the poor--are forced
to seek work in the nonfarm sector. By contrast, only 30
percent of Jordan's cultivated land base is irrigated
and crop yields are low. So Jordan's rural population
does not press for access to land because the attractive
economic rates of return are found in the non-farm sector.
Unlike Egypt's rich, rural Jordan's rich earn less
than 10 percent of their total per capita income from
agriculture and more than 55 percent of it from non-farm
sources. 3) The poor in both countries depend heavily on
government employment to decrease inequality. Government
wages provide 43 percent of non-farm income for Egypt's
rural poor and 60 percent of Jordan's. But since both
governments already employ far more workers than they can
possibly use, advocating increased government employment to
reduce inequality would not be wise policy advice. From a
policy standpoint, it would be better to reduce income
inequality by focusing on non-farm unskilled labor (for
example, in construction, brick-making, and ditch-digging),
an important income source. 4) In Egypt non-farm income
decreases inequality because inadequate access to land
"pushes" poorer households out of agriculture and
into the non-farm sector. Although agricultural income is
positively associated with land ownership in rural Egypt,
that ownership is unevenly distributed in favor of the rich,
so nonfarm income is not linked to land ownership and is
thus more important to the rural poor. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Adams, Richard H. |
| author_facet |
Adams, Richard H. |
| author_sort |
Adams, Richard H. |
| title |
Nonfarm Income, Inequality, and Poverty in Rural Egypt and Jordan |
| title_short |
Nonfarm Income, Inequality, and Poverty in Rural Egypt and Jordan |
| title_full |
Nonfarm Income, Inequality, and Poverty in Rural Egypt and Jordan |
| title_fullStr |
Nonfarm Income, Inequality, and Poverty in Rural Egypt and Jordan |
| title_full_unstemmed |
Nonfarm Income, Inequality, and Poverty in Rural Egypt and Jordan |
| title_sort |
nonfarm income, inequality, and poverty in rural egypt and jordan |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2001/03/1047507/nonfarm-income-inequality-poverty-rural-egypt-jordan http://hdl.handle.net/10986/19687 |
| _version_ |
1764440357015126016 |
| spelling |
okr-10986-196872021-04-23T14:03:44Z Nonfarm Income, Inequality, and Poverty in Rural Egypt and Jordan Adams, Richard H. AVERAGE INCOME BARLEY DATA SET DATA SETS DECOMPOSITION ANALYSIS DECOMPOSITION RESULTS DECOMPOSITION TECHNIQUES DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPING WORLD DIVIDENDS ECONOMIC PERFORMANCE EMPIRICAL LITERATURE EXPENDITURES EXPLANATORY VARIABLES FACTOR INCOME GINI COEFFICIENT GROSS INCOME HIGH CONCENTRATION HOUSEHOLD CONSUMPTION HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD MEMBERS HOUSEHOLD SIZE HOUSEHOLD SURVEYS IMPORTS INCOME INCOME INCOME DISTRIBUTION INCOME EQUATION INCOME INEQUALITY INCOME LEVELS INCOME SHARE INCOME SOURCE INCOME SOURCES INCOMES INEQUALITY INEQUALITY DECOMPOSITION INEQUALITY MEASURE LAND OWNERSHIP MEAN VALUE MEASUREMENT PROBLEMS MIDDLE CLASS NEGATIVE EFFECT NEGATIVE IMPACT NONFARM INCOME PER CAPITA INCOME POLICY ANALYSIS POLICY RESEARCH POOR POSITIVE EFFECT POSITIVE IMPACT POVERTY REDUCTION PRIVATE SECTOR PRIVATE SECTOR EMPLOYMENT PRIVATE TRANSFERS PUBLIC SECTOR REGRESSION ANALYSIS REGRESSION RESULTS RELATIVE IMPORTANCE SAVINGS SECURITIES SOCIAL SAFETY WAGE RATES WAGES The rural economy of developing countries has long been regarded as synonymous with agriculture but in recent years this view has begun to change. Such diverse activities as government, commerce, and services are now seen as providing most income in rural households. Applying decomposition analysis to two new nationally representative sets of household data from Egypt and Jordan, the author examines how different sources of income--including nonfarm income--affect inequality in rural income. He concludes: 1) Nonfarm income has different impacts on poverty and inequality in the two countries. In Egypt the poor (those in the lowest quintile) receive almost 60 percent of their per capita income from nonfarm income. In Jordan the poor receive less than 20 percent of their income from nonfarm income. So nonfarm income decreases inequality in Egypt and increases it in Jordan. 2) Access to land accounts for this difference between the two countries. In Egypt the cultivated land base is totally irrigated and very highly productive. Egypt's large rural population seeks access to land but because the land-to-people ratio is so unfavorable, only a minority of rural inhabitants actually own land. The rest--especially the poor--are forced to seek work in the nonfarm sector. By contrast, only 30 percent of Jordan's cultivated land base is irrigated and crop yields are low. So Jordan's rural population does not press for access to land because the attractive economic rates of return are found in the non-farm sector. Unlike Egypt's rich, rural Jordan's rich earn less than 10 percent of their total per capita income from agriculture and more than 55 percent of it from non-farm sources. 3) The poor in both countries depend heavily on government employment to decrease inequality. Government wages provide 43 percent of non-farm income for Egypt's rural poor and 60 percent of Jordan's. But since both governments already employ far more workers than they can possibly use, advocating increased government employment to reduce inequality would not be wise policy advice. From a policy standpoint, it would be better to reduce income inequality by focusing on non-farm unskilled labor (for example, in construction, brick-making, and ditch-digging), an important income source. 4) In Egypt non-farm income decreases inequality because inadequate access to land "pushes" poorer households out of agriculture and into the non-farm sector. Although agricultural income is positively associated with land ownership in rural Egypt, that ownership is unevenly distributed in favor of the rich, so nonfarm income is not linked to land ownership and is thus more important to the rural poor. 2014-08-26T16:02:35Z 2014-08-26T16:02:35Z 2001-03 http://documents.worldbank.org/curated/en/2001/03/1047507/nonfarm-income-inequality-poverty-rural-egypt-jordan http://hdl.handle.net/10986/19687 English en_US Policy Research Working Paper;No. 2572 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Middle East and North Africa Egypt, Arab Republic of Jordan |