Impact of Agricultural Enterprises on Employment Creation and Income Generation in Hadiya Zone, Ethiopia

Abstract

This study seeks to examine the impact of agricultural enterprises on employment creation and income generation in Hadiya zone, Ethiopia. Data were collected from 383 randomly selected household heads, eighteen FGDs and five key informants’ interviews. Data were analyzed using descriptive statistics and econometric model called propensity score matching. The survey results show that out of 383 sampled household heads 125(32.5%) were members and the remaining 258 (67.5%) were non-members. The propensity score matching result shows that being member in micro and small agricultural enterprises (MSAEs) had significant positive impact on members’ employment creation and income generation. The result revealed that the membership resulted in average increment of household’s annually employment creation by about 4 people (33.98%) and income generation by Birr 12,339.00 (32.57%). The result showed that membership in MSAEs had a significant and positive impact on employment creation and income generation and the impact estimates were found to be insensitive to unobserved selection bias. It is, therefore, essential to expand and strengthen development of agricultural enterprises and the membership of households. Keywords: Agricultural enterprises, employment creation, income generation, propensity score matching. DOI: 10.7176/EJBM/12-4-07 Publication date: February 29th 202