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The rural non-farm economy, livelihood strategies and household welfare


  • Stifel, David


This paper examines the relationship between rural non-farm employment and household welfare using nationally representative data from Madagascar. It focuses on labor outcomes in the context of household livelihood strategies that include farm and non-farm income earning opportunities. It identifies distinct household livelihood strategies that can be ordered in welfare terms, and estimates multinomial logit models to assess the extent of the barriers to choosing dominant strategies. It finds that high-return non-farm activities provide an important pathway out of poverty, but that barriers such as lack of (a) education, (b) formal credit and (c) access to telecommunications restrict participation in such activities. Individual employment choice models and estimates of earnings functions provide supporting evidence of these barriers. Although the poverty reduction effects may be limited, low-return non-farm activities also play an important role as safety nets by providing opportunities for ex ante risk reduction and ex post coping with shocks.

Suggested Citation

  • Stifel, David, 2010. "The rural non-farm economy, livelihood strategies and household welfare," Journal of Cooperatives, NCERA-210, vol. 4(1), March.
  • Handle: RePEc:ags:jlcoop:93887

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    References listed on IDEAS

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    Cited by:

    1. Taruvinga, Amon & Mushunje, Abbyssinia, 2012. "Buffer zone income dynamics for the sub-district producer community: Implications for rural off-farm income, income inequality and the development of household agriculture," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126377, International Association of Agricultural Economists.
    2. Alemu, Zerihun Gudeta, 2012. "Livelihood Strategies in Rural South Africa: Implications for Poverty Reduction," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125411, International Association of Agricultural Economists.


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