Determinants of Rural Households’ Off-farm Employment Participation and Income in Rural Tigray: Evidence from Endamokonni and Degua Tembien Woredas of Tigray Region, Ethiopia

This study examines the determinants of off-farm employment participation and income of rural households in rural Tigray, using evidence from Endamokonni and Degua Tembien Woredas of Tigray region, Northern Ethiopia. Results are based on data collected from a survey of 205 randomly selected rural households. Both bivariate probit and univariate probit models are used to estimate the off-farm wage and off-farm self employment participation. Given participation, the factors that affect per capita off-farm employment income are analyzed using two step Heckman selection model. This considers for possible self selection in the estimation procedure. Age and formal education of the household head, number of children with 10 years old or under and district where the households live significantly affects participation in off-farm wage work. On the contrary, participation in off-farm self employment is strongly determined by sex of the household head, number of adult male in the household, per capita non labor income, credit use, per capita livestock holding, district and distance to the nearest all weather road and distance to the nearest major market. Households with large farm size, informally educated heads and those who live in Endamokonni Woreda earn significantly higher income from wage work. Households with older heads, more adult males, more children with five years old or under, higher livestock holding and those who live far-off from major market earns lower off-farm wage income, in case they participate. Given participation, male headed families earn higher income from off-farm self employment than the female headed counterparts. Number of adult male and children with six to ten years old in the family negatively and significantly relates with the level of per capita self employment income. This may be because off-farm self employment income is expressed in per capita terms.