Rural non-agricultural activities and poverty in the Brazilian northeast
This paper combines two complementary data sets to present a disaggregated spatial profile of poverty in the Brazilian Northeast, and to investigate the importance of non-agricultural activities for its rural dwellers. We present both univariate and multivariate profiles of non-agricultural employment and discuss its determinants. While the main occupational difference between the rural poor and the rural non-poor in Brazil seems to be the greater reliance of the former on paid agricultural employment (vis-à-vis own cultivation), rather than access to non-agricultural activities, the evidence nevertheless suggests that diversification into this growing sector provides both an important complement to the budgets of the poor, and possibly a self-insurance mechanism against negative shocks. Despite the substantial heterogeneity of the sector, two general findings are robust: returns to education are comparatively high; and location in relation to urban areas is an important determinant of both employment and earnings in rural non-agricultural activities.
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