Nonfarm employment, agricultural shocks, and poverty dynamics: evidence from rural Uganda

This article examines the role of off-farm employment in poverty reduction over a short period of time by using panel data from 894 rural Ugandan households in 2003 and 2005. Taking advantage of the unique off-farm labor supply and income data, we analyzed how households respond to negative agricultural shocks, especially through off-farm labor supply and income to mitigate crop income loss. Our analysis indicates that the flexibility of labor time allocation varies across off-farm jobs and that only low skilled and low wage jobs tend to be used to mitigate negative shocks, especially among the asset poor.