Nonfarm Income, Inequality, and Poverty in Rural Egypt and Jordan

Adams, Richard H.

World Bank, Washington, DC

关键词: AVERAGE INCOME;    BARLEY;    DATA SET;    DATA SETS;    DECOMPOSITION ANALYSIS;   

DOI  :  10.1596/1813-9450-2572
RP-ID  :  WPS2572

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The rural economy of developingcountries has long been regarded as synonymous withagriculture but in recent years this view has begun tochange. Such diverse activities as government, commerce, andservices are now seen as providing most income in ruralhouseholds. Applying decomposition analysis to two newnationally representative sets of household data from Egyptand Jordan, the author examines how different sources ofincome--including nonfarm income--affect inequality in ruralincome. He concludes: 1) Nonfarm income has differentimpacts on poverty and inequality in the two countries. InEgypt the poor (those in the lowest quintile) receive almost60 percent of their per capita income from nonfarm income.In Jordan the poor receive less than 20 percent of theirincome from nonfarm income. So nonfarm income decreasesinequality in Egypt and increases it in Jordan. 2) Access toland accounts for this difference between the two countries.In Egypt the cultivated land base is totally irrigated andvery highly productive. Egypt's large rural populationseeks access to land but because the land-to-people ratio isso unfavorable, only a minority of rural inhabitantsactually own land. The rest--especially the poor--are forcedto seek work in the nonfarm sector. By contrast, only 30percent of Jordan's cultivated land base is irrigatedand crop yields are low. So Jordan's rural populationdoes not press for access to land because the attractiveeconomic rates of return are found in the non-farm sector.Unlike Egypt's rich, rural Jordan's rich earn lessthan 10 percent of their total per capita income fromagriculture and more than 55 percent of it from non-farmsources. 3) The poor in both countries depend heavily ongovernment employment to decrease inequality. Governmentwages provide 43 percent of non-farm income for Egypt'srural poor and 60 percent of Jordan's. But since bothgovernments already employ far more workers than they canpossibly use, advocating increased government employment toreduce inequality would not be wise policy advice. From apolicy standpoint, it would be better to reduce incomeinequality by focusing on non-farm unskilled labor (forexample, in construction, brick-making, and ditch-digging),an important income source. 4) In Egypt non-farm incomedecreases inequality because inadequate access to land"pushes" poorer households out of agriculture andinto the non-farm sector. Although agricultural income ispositively 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 isthus more important to the rural poor.