Abstract:
In many developing countries, rural economies are predominantly agrarian; with smallholder farmers especially for women are heavily dependent on agriculture for their livelihoods. However, agriculture alone often fails to provide a sustainable living, making income diversification a crucial strategy for improving household welfare. This study investigates the determinants of income diversification participation and its impact on their livelihood among female-headed households in Walmara Woreda, Oromia Regional State, Ethiopia. A total of 200 rural women were selected using a multi-stage sampling technique, and primary data were collected through structured questionnaires, complemented by secondary sources from local institutions. Data analysis employed descriptive statistics and econometric models including the binary Logit, Beta Regression and Propensity Score Matching (PSM). The findings indicate that about 78% of female headed participated in income diversification while 22% do not, primarily due to challenges such as inadequate infrastructure, limited access to credit, societal attitudes, aging, and lack of awareness and training. The Simpson Index of Diversity (SID) for income distribution is 0.766, indicating a moderately high level of income diversification in the study area. On the other hand, education level, age, family size, livestock ownership, irrigated land, land ownership, close to nearest market, and credit access significantly and positively influenced participation in income diversification, while gender-based discrimination, distance from markets, and low agricultural income had a negative impact similarly on intensity of income diversification and likelihoods of female herded households in Walmara Woreda. Despite these barriers, however, both push and pull factors influenced participation in non-farm income activities. Based on these findings, the study recommends targeted policy interventions, including expanding rural financial services to improve women’s access to credit; improving rural infrastructure such as roads and market facilities; providing vocational training and adult education programs tailored to rural women; promoting awareness campaigns to challenge gender-based discrimination; and supporting integrated rural development programs that combine agricultural support with off-farm income opportunities. These measures can enhance the capacity of female-headed households to diversify their income and improve their overall livelihoods.
