Determinants of non-farm employment and non-farm earnings in Ecuador

Abstract

This article analyses the determinants of both participation in non-farm employment and nonfarm earnings in Ecuador. Using the Dubin-McFadden two-step estimation method, the results show that women are more likely than men to engage in non-farm self-employment but earn significantly less than men employed in the non-farm sector. Non-farm wage employment is a common choice among more educated individuals in landless households, while farm wage employment seems to be the only source of employment for uneducated landless people. Participation in non-farm work is more likely in areas located near medium-sized cities with dynamic economies. Finally, there are regional differences in employment patterns which appear to be associated with both the availability and the quality of land. This information is relevant in relation both to rural population growth and to the continuous process of land fragmentation in rural Ecuador.