Income mobility of rural households: Are female headed households participating in Ethiopia’s economic growth?

Abstract

Over the last decade, Ethiopia has had one of the fastest growing economies in the world with annual growth rates averaging approximately 9.2% and 5.3% for the overall economy and the agricultural sector, respectively. Concomitant with this growth has been falling poverty rates and slightly rising inequality. While average growth has been strong, relatively little research has been performed on mobility within income quartiles, particularly among rural households. Using a panel of 1,899 households, taken from three rural household surveys carried out between 2012-2019, this paper explores the overall levels and trends of recent income mobility in rural Ethiopia. We conclude that female headed households, at the lower asset quartiles, are earning less income, marketing a smaller share of cereal crops, and experiencing less growth which, unlike comparable male headed households in lower quartiles, is leading to relative stagnation, and rising inequality. The implications for policymakers are important for improved targeting for pro-poor growth strategies as well as a better understanding of the heterogenous economic status of female headed households in rural Ethiopia more generally.