Poor rural households in Ethiopia have benefitted from the country's economic growth, but still lag behind due to their lower initial assets and slower progress. The poor have larger, less educated families, consume fewer calories, and use fewer modern agricultural inputs. Their children are more likely to be stunted and attend school less. Women in poor households also have less empowerment. While poverty has declined overall, continued targeted interventions are needed to ensure the poor can better participate in and benefit from Ethiopia's ongoing development.

1. Economic Lives of the Poor in Rural
Ethiopia
Alemayehu Seyoum Taffesse and Fanaye Tadesse
Inclusive Transformation of Rural Ethiopia: Patterns and Options
Addis Ababa, Ethiopia
May 2, 2019

2. Introduction
 Ethiopia has recorded an average of 10% growth rate over the
past decade.
 Rural poverty levels have dropped from 45.4% in 1999/2000 to
25.6% in 2015/16 (NPC (2017)).
 Productivity-enhancing investments in extension, roads,
telecommunications
 Pro-poor investments focusing on education and health sectors.
 A series of social protection programs in food insecure areas.
 Still, a lot of people in poverty
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3. Objectives and approach
 Objective:
 Characterize the poor in terms of their economic lives
 Highlight the risk of exclusion
 Make broad policy implications for inclusiveness
 Focus : the rural population– the bulk of which resides in Small-holder
farming households
 Domains: Demography, education, production inputs, nutrition,
empowerment and psychological factors.
 Poor: Bottom expenditure quintile, contrast with top expenditure quintile
 Data:
 Nationally representative data: HCE (2005-2016), DHS (2005-2016),
 Other surveys : PSNP (2006-2018); FTF (2013-2018)
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4. Household size and Dependency Ratio
4
Household Size
Poorest Average Richest t-test
HCE/WMS
2005 6.3 5.0 3.3 ***
2016 5.7 5.1 3.8 ***
PSNP
2006 6.0 5.0 4.0 ***
2018 5.7 5.1 4.1 ***
FTF
2013 5.4 4.8 4.1 ***
2018 5.3 5.1 4.8 ***
Poorest Average Richest
HCE/WMS
2005 1.5 1.2 0.5 ***
2016 1.3 1.2 0.8 ***
PSNP
2006 1.5 1.3 1.0 ***
2018 1.5 1.2 1.0 ***
FTF
2013 1.2 1.2 1.1 ***
2018 1.2 1.2 1.1 ***
Dependency ratio (Number of dependent members divided by
number of working age hhd members)
Poor
households:
larger and
with higher
dependency
ratio

5. Education
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Education level of household head
Poorest Average Richest t-test
WMS/HCE (2016)
No education 61.1 56.1 50.5 ***
Primary 28.6 35.5 34.7 ***
Secondary 1.4 3.4 6.1 ***
Tertiary 0.2 1.0 5.3 ***
PSNP (2018)
No education 68.7 63.6 62.8 ***
Primary 29.6 33.2 31.5
Secondary 1.6 3.1 4.5 ***
Tertiary 0.2 0.2 1.2 ***
FTF (2018)
Illitrate 60.6 58.4 54.9 ***
Primary 35.7 36.8 38.1 ***
Secondary 3.2 4.5 6.1 ***
Tertiary 0.5 0.3 0.8 ***
Poor households:
less educated heads

6. School Attendance of Children
6
22.5
42.6
55.8
46.5
65.2
77.7
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
Poorest Middle Richest
Net attendance ratio for
primary school (among
children age 7-14)
2005 2016
1.4 1.9
6.3
3.2
6.8
18.6
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Poorest Middle Richest
Net attendance ratio for
secondary school (among
children age 15-18)
2005 2016
Poor households:
Children have lower school
attendance rate
DHS (using wealth quintiles)

7. Agricultural Input
7
Input use Poorest Richest
FTF
2013
% using Chemical fertilizer 43.1 49.0
% using Improved seeds 19.8 21.7
2018
% using Chemical fertilizer 56.0 66.2
% using Improved seeds 30.8 39.3
PSNP
2006
% using Chemical fertilizer 12.9 19.6
% using Improved seeds 1.9 5.4
2018
% using Chemical fertilizer 38.8 53.3
% using Improved seeds 17.4 24.9
Poor households:
Percentage that use modern inputs is
lower

8. Food Security
 Food gap (the number of months household reported to have
food shortage in the last 12 months)
8
2.21
1.83
1.54
3.57
3.09
2.59
0.00 1.00 2.00 3.00 4.00
Poorest
Average
Richest
PSNP (2006-2018)
2006 2018
(-38.0%)
(-40.6%)0.55
0.33
0.25
1.65
1.22
0.80
0.00 0.50 1.00 1.50 2.00
Poorest
Average
Richest
WMS/HCE (2005-2016)
2005 2016
(-69.0%)
(-66.6%)

9. Nutritional outcomes
9
Calorie consumption
Energy Deficiency - Percent of population consuming less than
2,200 kcal / adult equivalent / day (2015/16)
Total poorest Average richest
Rural 24.6 55.4 13.3 1.2
Source: computed from HCE(2015/16) data

10. Nutritional outcomes of children (DHS)
10
Poorest Average Richest
2005
Stunted 53.2 54.9 46.8
wasted 17.3 12.2 9.1
underweight 40.2 38.2 32.3
2016
Stunted 39.3 39.1 31.8
wasted 15.9 9.4 6.6
underweight 29.0 25.6 16.4
Poorest Average Richest
(2005-2016)
Stunting -26.1 -28.9 -32.1
Wasting -8.2 -22.6 -27.9
Underweight -28.0 -33.1 -49.2
Nutritional outcomes of children by wealth quintile

11. 11
Empowerment in agricultural sector
 WEAI (Women Empowerment in Agriculture Index)- Measures
empowerment, agency, and inclusion of women and men in
agricultural sector - FTF survey
 Measures empowerment in 5 major domains
Domain Indicator
Production
Input in productive decisions
Autonomy in production
Resources
Ownership of assets
Purchase, sale, or transfer of assets
Access to and decisions about credit
Income Control over use of income
Leadership
Group member
Speaking in public
Time
Workload
Leisure

12. Domains of women empowerment by
expenditure quintile
12
0 20 40 60 80 100
Input in productive decisions
Autonomy in production
Access to and input into
decisions on credit
Control over use of income
Group membership
Speaking in public
Leisure
Richest Average Poorest

13.  Women empowerment generally low
 Aspiration: Gender gap
• Women have on average lower educational aspirations for
their children than men;
• Parents have lower educational aspirations for their
daughters than sons;
On women empowerment
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14. 14
 LOC: A person’s belief regarding the primary causation of
events in his/her life.
 “Each person is primarily responsible for his/her own success or failure in life”
OR “One’s success or failure is a matter of his/her destiny”
 “To be successful, above all one needs to work very hard”. OR “To be
successful, above all one needs to be lucky”
Locus of Control by Expenditure Quintile
36.1
30.4
28.0
25.2
27.4
23.6
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
One’s success or failure is a matter
of his/her destiny
To be successful, above all one
needs to be lucky
Poorest Average Richest

15. Perception on improvement in living conditions
(PSNP4 2018)
15
27.1
47.7
25.2
33.3
39.9
26.8
40.6
33.3
26.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Improved Stayed the same Worsened
Poorest Average Richest

16. Conclusion
 In the last two decades, Ethiopia has been successful in accelerating
growth, expanding education and health access, and reducing poverty.
 Poorer households shared in this success;
 Nevertheless, the poorest still lag behind due to low initial endowments and
slower rate of positive changes;
Examples: less educated heads and children; higher number of dependents;
fewer calories per capita per day; more stunted children; less empowered;
less quantities of modern inputs;
 These form risks of exclusion from further gains and can lead to the
persistence of poverty and inequality;
 Business as usual will not be enough overcome these obstacles;
 Better targeted and constraint-focused solutions required.
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17. Thank You.
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