Household-level determinants of employment and earnings in rural Nigeria

Abstract

Despite the extensive literature on rural poverty outcome, the labour employment channel has not been carefully investigated for rural Nigeria. The paper used the socioeconomic data from the three waves of the Nigerian General Household Survey Panel (2010/2011, 2012/3013 and 2015/2016 to examine the nature of household employment. By exploiting the panel nature of the data, we used a logit model and fixed effect approach to analyze the factors determining the employment expansion and earnings. From the descriptive statistics, agricultural employment sectoral share remains substantial but declined over the period considered. The study finds that much of the employment in rural Nigeria during the period 2010 to 2015 is farm self-employment. Though declining, it is two times the non-farm employment share and five times wage employment share. Wage employment is least and declining during the period covered. Findings from the econometric analysis suggest rural programmes that promote rural infrastructural, human capital development, networking, higher income and the diversity of income. It is an imperative policy goal to create an enabling environment for productivity and employment-intensive growth across all sectors of the economy particularly in agriculture. .

Keywords:

• Agriculture
• earnings
• households
• poverty reduction
• rural employment
• labor Supply
• structural transformation

PUBLIC INTEREST STATEMENT

Nigeria’s population is projected to increase to 400 million by 2050. While it offers potential opportunity as a source of labor supply, there is the disturbing concern of a looming employment crisis. Already unemployment is worsening in the rural sector where poverty is a phenomenon. Employment and income opportunities for the rural population are channels for poverty reduction. To transform economic growth into more employment and income opportunities, reforms are needed across multiple labor subsectors including utilization of improved technologies, investment in skill and problem-solving levels for the labor force, lower transactions costs to connect and integrate economic activities, and more efficient allocation of resources.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Among many programs, Nigeria’s government launched the Agriculture Transformation initiative and the Growth Enhancement Support program (GES). The government also initiated the Commercial Agricultural Credit Scheme (CACS) and the Nigerian Incentive-Based Risk Sharing for Agricultural Lending (NIRSAL).

2. Though large enterprises exist, they are few and employ labor on long-term contracts ranging from a season to many years. Small enterprises/farms also engage hired labor on a day−to−day basis or for a particular task.

3. Employment refers to all persons of working age who worked for pay, profit, or family gain during a specified reference period. It also includes all persons who had a job or enterprise but were absent from that job or enterprise during that period temporarily (e.g., persons who during the reference period were sick, on vacation, on maternity leave, on strike, or were temporarily laid off) (ILO, 2013a, 2013b).

Additional information

Funding

The authors received no direct funding for this research.

Notes on contributors

John Chiwuzulum Odozi

Abigail Gbemisola Adeyonu holds a Ph.D. in Agricultural Economics and a Lecturer I in the Department of Agricultural Economics and Extension, Landmark University, Nigeria where she teaches courses in economics and research methodology at undergraduate and graduate levels. She has researched and published on various issues relating to livestock economics, development economics which focus on rural areas.

John Chiwuzulum Odozi holds a Ph.D. in agricultural economics and is a Senior Lecturer in the Department of Agricultural Economics and Extension, Ajayi Crowther University, Nigeria. He is also a Senior Research Fellow at the French Institute for Research in Africa, University of Ibadan, Nigeria. His research focuses on issues about the economics of agriculture with a special focus on rural income growth and food security and how climate and non-climate shocks affect the rural population.