Non‐farm Income Diversification in Rural Ghana: Patterns and Determinants

Abstract: Evidence abounds in the rural livelihoods literature that rural households do not only receive a significant proportion of their incomes from non‐farm sources, but also it is a significant source of employment for rural folks. This paper examines the pattern and determinants of non‐farm income diversification in rural Ghana. Results show that off‐farm income constituted 43 percent of rural household income in 2005/6. Female‐headed households tend to have larger off‐farm income shares compared to male‐headed households. Non‐farm income shares followed the same gender pattern albeit less pronounced. Unlike in Latin America and Asia, in rural Ghana, non‐farm self‐employment income is more important than non‐farm wage‐employment income. Regression results show that the gender composition of households, age, education, and access to credit, electricity and markets are important determinants of multiple non‐farm activities and non‐farm income. The findings call for strategies that can help rural households maximize the benefits from income diversification.     

Socio-economic dimensions of small-scale agriculture: A principal component analysis

In order to study the different dimensions of small-scale farmers in KwaZulu-Natal, a principal component analysis was conducted on data obtained from a sample survey of 160 households. The following socio-economic components were extracted: Component 1 is an emerging commercial and mechanised household (i.e. it uses machinery), while Component 2 is a landless farm household that is more educated and earns more non-farm income, largely from contractor services. Component 3 is a non-farm female-headed household that depends on income from land renting and a non-farm job. This is a resource-poor household. Component 4 is a small intensive garden farmer household headed by a more educated female with better access to institutional services. Component 5 is a less educated, female-headed and land-poor household that rents in more land and is an intensive producer. Component 6 is a land-less household that rents in land and is also involved in contractor services. The implication is that policies aimed at assisting small-scale farmers should take into account the different dimensions of farmers, as economic policies may influence different households differently.     

Diversify and prosper: Peasant households participating in emerging markets in northeast rural China

Following the sequence of radical rural reforms commencing in 1978, many peasant households in the People's Republic of China (PRC) have been actively diversifying away from time-honored grain production. This article examines the microlevel rewards accruing to a sample of village households located in the northeast province of Liaoning. In particular, we identify and then measure how such diversification affects household income, the level of employment, and the returns to labor. Two explanatory variables are constructed as surrogates for income-source diversification in a series of household production functions. Our results provide robust evidence that households that move from grain enhance significantly several indicators of their economic well-being.     

Agricultural growth multipliers for two communal areas of KwaZulu-Natal

Expenditure data were collected from 99 households in two rural areas of KwaZulu-Natal. District and wealth group expenditure analyses suggest a less-than-proportional increase in the demand for tradable farm commodities, and a more-than-proportional increase in the demand for non-tradable farm commodities following a 1 per cent increase in household expenditure. Expenditure on non-farm tradables (imported consumer durables) showed the greatest potential for demand growth, with expenditure elasticities ranging from 1,75 to 2,59. An increase of R1,00 in household income is predicted to add an additional 28 cents (multiplier of 1,28) to the local economy. The study estimates relatively weak growth linkages. However, even relatively weak growth linkages could lead to much needed new income and employment opportunities in the local farm and non-farm sectors if the constraints limiting agriculture, and hence broad-based growth in rural incomes, are alleviated. Agriculture-led growth in South Africa requires public investment in both physical and institutional infrastructure to reduce transaction costs and risks in all markets, thus encouraging greater participation by local entrepreneurs and private sector investors. In addition, the roles, functions and services offered by extension agents should be extended to promote collective marketing, facilitate land rental contracts and provide training, technical and business support for farm and non-farm entrepreneurs.     

数字金融、家庭财富与共同富裕

文章使用2017年中国家庭金融调查(CHFS)数据,实证研究了数字金融对家庭财富积累、财富不平等的影响。研究发现:(1)在考虑了内生性问题的影响后,数字金融能够显著促进家庭财富积累,经过使用多种方法进行稳健性检验,该结论依然成立。(2)创业和配置风险金融资产是数字金融影响家庭财富的重要渠道。(3)财富规模越小的家庭,使用数字金融产生的创富作用越大,并且老年人、低教育程度、低收入水平、农业户口群体家庭和农村居民家庭使用数字金融能够产生更大的创富作用。总的来说,财富是富裕的题中之义,数字金融能够在提升家庭财富总体水平的基础上缓解财富不平等,从而有利于实现共同富裕。文章的研究发现为推动共同富裕提供了政策参考依据。     

Rural–urban differences in parental spending on children's primary education in Malawi

Using Malawian data, this paper answers two interrelated questions: are there rural–urban differences in the factors that influence the probability that a household spends or does not spend on own children's education; and are there rural–urban differences in the factors that affect educational expenditure if a household decides to spend? Computed elasticities indicate that spending on education by rural households is more sensitive to changes in income compared with urban households, suggesting that spending on education in rural areas is a luxury good. In both areas, a mother's employment and education has a larger impact on spending compared with those of a father. Urban households compared with their rural counterparts are more sensitive to the quality of access to primary schools. We find no evidence of gender bias in school spending in urban areas, but rural households exhibit bias in favour of boys.     

Consumption,financial wealth and labor income in Korea

By examining the relationship between consumption, financial wealth and labor income in Korea, this paper presents three key findings. First, we find evidence that Korean households hold a larger proportion of their wealth in human capital instead of financial wealth, compared to households in other countries. Potentially, this finding appears consistent with Koreans’ enthusiasm for human development through education despite low government funding. Another important finding is that only financial wealth fluctuations contain a large portion of temporary components. Hence, financial wealth is mainly responsible for adjustments to restore the long-run relationship between consumption, financial wealth and labor income during the examined period. Third, and perhaps most interestingly, this paper finds that before the 1997 Asian financial crisis, households in Korea had difficulty smoothing their consumption over time. This finding may be at least partly attributable to households’ limited access to bank loans and their low level of financial wealth accumulation prior to the crisis. In contrast, we find little evidence that households’ consumption behavior has changed during the recent global financial crisis.     

The Determinants of Nonfarm Income Diversification in Rural Peru

This paper shows that in Peruvian rural areas, there has been substantial growth over the past decade in household employment outside of own-farming. At present 51% of the net income of rural households comes from these off-farm activities, and thus they certainly cannot be considered as “marginal.” The reasons households diversify their incomes are several. Access to public assets such as roads and private assets such as education and credit is an important factor in diversification. Increasing access to these assets will help rural households to increase their self-employment as well as wage employment in the nonfarm sector.     

Integration into the South African core economy: household‐level covariates

In this analysis of household survey data, households' main income sources are used as indicators of integration into the South African core economy. The allocation of main income sources is studied as the outcome of households' demographic composition, geographic location and earners' characteristics. The emerging picture of household income generation is one that disputes the common perception of African households as raising their incomes from a multitude of sources. The majority of surveyed households rely to a large extent on a single source of income and a single income earner. Separate multinomial logit models are estimated for urban and non‐urban households where, in addition to the considerable association with non‐urban residence, prominent earner covariates of low‐integration income sources are female gender, old or young working age, and low levels of education. Both provincial location and within‐provincial, subregional locations display strong impacts. The study also finds associations between main income sources and households' demographic compositions that are compatible with findings both in studies on private transfer behaviour and in the growing literature on endogenous household formation in South Africa.     

INCOME INEQUALITY IN THE PHILIPPINES, 1961–91

Household income inequality in the Philippines remains high and the trends for three decades have been fairly stable except for a sharp decline in the mid-1980s. Gini coefficient of income inequality has been consistently close to 0.50. Urbanization and education of household head are the most important factors determining the level of income inequality while the contribution of age of head is limited. The increase in the number of urban households results in an increase of overall inequality while the increase in the number of household heads with a college education tends to decrease the inequality. Among the household income sources, wage income is the largest contributor to total income inequality. Wage rate inequality appears to be a major source of wage income inequality.     

Do Chinese farmers reinvest in grain production?

Grain production is affected by the relocation of farm household labour from on-farm to off-farm activities and by an increase in the investment in grain production as a result of increase in farm household income that occurs along with such a labour shift. This study uses a recent farm household survey data to examine whether Chinese grain households do reinvest in grain production. It has found that household income growth contributes to higher investment in grain production although a higher share of non-agricultural income has a negative effect. The authors' other research has found a negligible direct impact of farm to non-farm labour transfer on grain production. We may conclude that in the near future, the total impact (direct and indirect) of labour transfer from farm to non-farm production on grain output is expected to be positive. In the long run, in may become negative when more and more labour shifts out of grain production and marginal product of labour becomes positive.     

Choices between different off-farm employment sub-categories: An empirical analysis for Jiangxi Province, China

This paper analyzes the relative importance of four sub-categories of off-farm employment, and the factors driving participation of individuals in these sub-categories for three villages in Jiangxi Province. We find that migration is the most important type of off-farm employment, while agricultural wage employment is a minor activity. Migrant remittances are smaller than household incomes earned from self-employment and local non-farm employment. The results of a multinomial probit analysis explaining off-farm participation decisions show that presence of young children in a household restrains participation in migration, while the presence of elderly persons and a higher level of education stimulate migration. Local wage employment and self-employment are not affected by these factors. The gender bias in access to off-farm employment is largest for agricultural employment and local non-agricultural employment. Land scarcity stimulates participation in migration and local non-agricultural employment, while possibilities to rent land out to other farmers stimulate only migration. The paper ends with policy suggestions for promoting off-farm employment within the own region and for altering the criteria for land distribution to rural households.     

Income Uncertainty and Wealth Accumulation: How Precautionary are Taiwanese Households?*

To assess how recent job loss impacts wealth accumulation of Taiwanese households, the present study investigates the empirical relevance of the precautionary saving motive to explain measures of wealth during the past 2 decades. This study demonstrates that households facing increased transitory shock accumulate increased amounts of financial and housing wealth, whereas permanent shocks cause households to accumulate housing wealth only. Empirical results suggest an important policy implication: households in Taiwan will save less when social insurance policies are effective in reducing future transitory and permanent shocks to household income.     

Changing Sources of Household Income,Poverty, and Sectoral Inequality in Sri Lanka, 1990–2006

Comparing dynamic changes in household income and poverty among urban, rural, and estate sectors in Sri Lanka from 1990 to 2006, this study finds that a shift of household income away from farm to nonfarm sources is accompanied by a significant improvement in household income and reduction in poverty, particularly in the rural sector. Major contributing factors are the rise in returns to labor, in general, and educated labor, in particular, due to the development of the nonfarm labor market. Persistently low income among estate households can be explained primarily by the limited availability of nonfarm employment opportunities and the low education levels of working members.     

The Scramble in Africa: Reorienting Rural Livelihoods

Structural adjustment and market liberalization policies of the past 15 years have accelerated deagrarianization in sub-Saharan Africa. Peasant producers have veered away from production of traditional export crops and commercial staple foods in rural areas remote from roads and urban markets. Nonagricultural income diversification has been substituted in the search for much-needed cash earnings. Citing recent village survey evidence, this paper argues that the economic restructuring of African smallholders' work lives has been accompanied by deep-rooted social change. Divisions of labor and decision-making power within peasant households have altered and wealth differentiation between households has deepened. Depeasantization of the countryside is currently taking place, as rural household members of both genders “scramble” for viable livelihoods.     

The Determinants of Nonfarm Activities and Incomes of Rural Households in Mexico,with Emphasis on Education

This paper presents the main results of a study of the effects of education (as well as other household assets) on the choice of activities and incomes of rural Mexican households. Our study examines the various income sources, as well as the education of the household's head and its members. Implications are drawn for rural education and development policies to promote rural nonfarm incomes and employment.     

Nonfarm Employment and Poverty Alleviation of Rural Farm Households in Honduras

This paper analyzes the role of nonfarm income of rural farm households in Honduras. It uses the national income and expenditure survey from 1993 to 1994. Income from nonfarm wage and self-employment represents 16–25% of farm household income and is especially important for middle and higher income strata. Nonfarm wage labor is geographically concentrated in small rural towns and in the industrial free zones located in the Northern region, while self-employment is particularly developed in the Southern region. Access to nonfarm wage employment is confined to educated individuals that belong to large households, while female members of wealthier households are mainly involved in self-employment. Food security is strongly enhanced through the engagement in nonfarm activities. Moreover, nonfarm income enables farmers to purchase external inputs for improving yields and labor productivity. Suitable policies to enhance nonfarm employment include education, training, and technical assistance to reduce labor intensity in agricultural production, as well as public investment and credit services to improve access to nonfarm activities.     

Food consumption patterns,seasonality and market access in Mozambique

Seasonal fluctuations in food consumption are a serious problem in rural Mozambique, where community isolation is high, and market integration, use of improved inputs, and access to off-farm income are low. This article uses household survey data to trace seasonal fluctuations in food consumption patterns and to analyse the ways households maintain access to calories. Significant substitution is observed between maize and cassava, and beans and green vegetables, over the production cycle. An analysis of the total expenditure elasticity of food groups reveals how precarious food security is in rural households in the poorest quintile. These households show near unitary expenditure elasticity for even the most basic staples of maize and cassava. The potential role of public policy in diminishing seasonal fluctuation in food consumption is explored using distance to road as an indicator of market access. The results show that distance to the nearest road has a significant effect on household food consumption patterns.     

Patterns of poverty in South Africa

This article brings together results from two large household surveys ‐ the October Household Survey and the Income and Expenditure Survey of 1995. The analysis adopts a simple definition of income poverty which allows comparisons between households in ten deciles defined on the basis of per capita household income. The analysis compares access to resources such as housing and land, and access to basic services across these households. It then examines the economic status of women and men living in households with different incomes. The article shows consistent correlation of per capita income with other examined variables. It illustrates further how women within each decile are disad‐vantagedcomparedwith men in terms of economic status and earning.