Returns from Income Strategies in Rural Poland

In order to stabilize and improve their income situation, rural households are strongly encouraged to diversify their activities both in and outside the agricultural sector. Most often, however, this phenomenon takes on only moderate proportions. This paper addresses issues of rural households’ income diversification in the case of Poland. It investigates returns from rural households’ income strategies using propensity score matching methods and extensive datasets spanning 1998-2008. Results suggest that returns from combining farm and off-farm activities were lower than returns from specialization, namely, concentrating on farming or on off-farm activities. Generally, farming seems to be the most attractive option for rural households and income difference between farmers and those who combine farming and off-farm activities increased after Poland joined the EU.