Local diversification of income sources versus migration: Complements or Substitutes? Evidence from rural families of the Senegalese Groundnut Basin

Much has been written to show the importance of diversification for rural African households because of the considerable share of non-farm revenues in total income (Reardon, 1997; Reardon et al., 1998). The literature points out push and pull factors explaining that risk and adverse shocks which characterize farm activities urge rural population to diversify into more profitable non-farm activities. But less attention has been paid to the distinction between two diversification patterns, namely local diversification and migration, and their relationship. Drawing on the theoretical and empirical literature, we identify the advantages and drawbacks of local diversification versus migration decision in terms of expected pay-offs for the family and the individual. Based on original data from a sample of rural families in two villages of the Senegal Groundnut Basin, the present paper examines whether local diversification and migration are complements or substitutes, by investigating the choice of the number of migrants in the family. We consider the family as a basis of reciprocal relations and point out that its role of insurance may differ when the member migrates. Our analysis indicates that when agricultural endowments are low and variable in the whole, migration is found to be functioning rather as an alternative activity to local diversification, than as a complement. Such a finding implies that with relative low returns expected from local economy, migration provides rural households with a form of