Using evidence of household income diversification to inform study of the rural nonfarm labor market in Africa

The labor market literature in developing countries has seldom drawn on the studies of rural household income diversification. This paper draws on such studies to inform future study of the rural nonfarm labor market in Africa. The review of evidence provides some surprising departures from traditional images of nonfarm activities of rural households. Among the most striking is the dominant importance in the majority of case study areas of nonfarm wage labor (as compared to self-employment). of nonfarm sector earnings (as compared to farm sector wage earnings), and of local nonfarm earnings (as compared to migration earnings). The most worrying finding was the poor distribution of nonfarm earnings in rural areas, despite the importance of these earnings to food security and farm investments. This poor distribution implies significant entry barriers and market segmentation; it Is probable that this will lead over time to an increasingly skewed distribution of land and other assets in rural Africa. (C) 1997 Elsevier Science Ltd.