Several empirical studies across developing countries document a positive correlation between participation in rural nonfarm employment and households' wealth or income status. However, the direction of causality is far from obvious. This paper explores whether nonfarm employment leads to higher...

The nonfarm activities in rural Ethiopia are heterogeneous. Some activities yield very high returns while others pay less than farm wage employment. This study examines the dynamics between 1999 and 2004. We find that access to saving and credit is an important factor for transition into...