Rural wage employment in Rwanda and Ethiopia: A review of current policy neglect in Ethiopia and Rwanda and a framework to begin to address it

This paper critically assess the belief, widely shared by policy-makers, that the rural poor in developing countries are small-scale subsistence farmers, supposedly making a living by working their own land with the help of family members. Such belief has profound policy implications, as it results in the focus by poverty reduction strategies on “making the market work for the poor” (who are understood to be exclusively producers). This paper shows that such a policy focus is highly problematic as it excludes millions of poor people in developing countries for whom working for other people is the main source of livelihood. The paper takes two African countries, Ethiopia and Rwanda, to show how official statistics suggests the insignificance of rural wage labour and the centrality of small-scale farming to the livelihoods of the poor. Such picture is then contrasted with the findings of primary research conducted in both countries, which shows the centrality of rural wage labour to the poorest. Having discussed the reasons for such a striking account of rural poverty and employment, the reports documents the policy neglect of rural labour markets by policy-makers in both countries. The paper concludes by stressing the urgency of making the rural labour market work for the poor a policy priority and by outlining key areas for intervention by policy makers.