Rural Non-Farm Employment and Household Welfare : Evidence from Malawi
This paper uses nationally representative panel data and a combination of econometric approaches, to explore linkages between rural non-farm activities (wage and self-employment) and household welfare in rural Malawi. The paper analyzes the average...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/161961496951955142/Rural-non-farm-employment-and-household-welfare-evidence-from-Malawi http://hdl.handle.net/10986/27296 |
| Summary: | This paper uses nationally
representative panel data and a combination of econometric
approaches, to explore linkages between rural non-farm
activities (wage and self-employment) and household welfare
in rural Malawi. The paper analyzes the average treatment
effects and distributional effects on participants'
welfare indicators, such as households' per capita
consumption expenditures. Then it investigates the effects
of non-farm activities on the use of agricultural inputs,
one channel through which non-farm employment might improve
the welfare of rural households. Although participation in
non-farm activities is not randomly assigned in the data,
the identification strategy relies on fixed effects and
correlated random effects estimation methods, dealing
effectively with time invariant heterogeneity, coupled with
geographical covariate adjustments, controlling for time
varying differences in local market conditions and
employment opportunities. The results suggest that non-farm
wage employment and non-farm self-employment are welfare
improving and poverty reducing. However, households at the
lower tail of the wealth distribution benefit significantly
less from participation than the wealthiest. Although the
results support the promotion of the rural non-farm economy
for poverty reduction purposes, they indicate that targeted
interventions that improve poor households’ access to
high-return non-farm opportunities are likely to lead to
bigger successes in curbing rural poverty. |
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