Does non-farm employment increase rural households’ consumption: Empirical Evidence from West Ethiopia?

Abstract In rural areas where the farmer's livelihood is based on farming, non-farm activity was considered as an additional source of income that plays an important role in improving household consumption. The Hackman results indicate that non-farm participation decision of households has positive significant effect on their level of household consumption. Incomes of the household, education level and family size have positive significant effect on household consumption. Variables such as education, access to credit, membership to iqub, household health status, access to training, and own savings, were identified to be the main factors positively influencing household decision to non-farm with a statistical significant level. The study's recommendation was; provide various pieces of farm and non-farm training provide the infrastructure that is a barrier to rural development and develop the culture of saving in the community.