The role of local nonfarm activities and migration in reducing poverty: evidence from Ethiopia, Kenya, and Uganda

Abstract By using cross‐sectional data from Ethiopia, Kenya, and Uganda, this article estimates the determinants of the participation in local nonfarm activities and migration at the individual level and then estimates the determinants of farm and nonfarm income. The results indicate that schooling and local language ability increase participation in local nonfarm activities and migration. Schooling also is found to increase nonfarm income at the household level but not farm income. We also find that farm household members from low‐potential agricultural areas are more likely to participate in local nonfarm activities and migration than those from high‐potential agricultural areas. Thus, the results suggest that local nonfarm activities and migration offer employment opportunities for workers from low‐potential agricultural areas. Indeed, the nonfarm activities and migration is likely to provide an important pathway to reduce poverty in low‐potential agricultural areas in East Africa.