Food Policy 36 (2011) 108–118

Contents lists available at ScienceDirect

Food Policy
journal homepage: www.elsevier.com/locate/foodpol

Non-farm work and food security among farm households in Northern Ghana q
Victor Owusu a, Awudu Abdulai b,⇑, Seini Abdul-Rahman a
a
Kwame Nkrumah University of Science and Technology, Kumasi, Ghana
b
University of Kiel, Kiel, Germany

a r t i c l e i n f o a b s t r a c t

Article history: This paper examines the impact of non-farm work on household income and food security among farm
Received 7 October 2009 households in the Northern Region of Ghana. We analyze the impact by employing propensity score
Received in revised form 9 June 2010 matching method that accounts for self-selection bias. The matching results show that participation in
Accepted 13 September 2010
non-farm work exerts a positive and statistically significant effect on household income and food security
Available online 16 October 2010
status, supporting the widely held view that income from non-farm work is crucial to food security and
poverty alleviation in rural areas of developing countries.
Keywords:
Ó 2010 Elsevier Ltd. All rights reserved.
Africa
Non-farm employment
Household income
Food security
Impact assessment

Introduction
One of the greatest challenges still facing most countries in sub-
Saharan Africa is how to feed their ever-increasing populations.
Agriculture which is the main source of income for about 90% of
the rural population in the region, has not been a sufficient vehicle
for solving household-level malnutrition and food insecurity, be-
cause of low productivity and hostile agro-ecological factors.
Reducing hunger and food insecurity has therefore remained an
essential part of the international development agenda since the
World Food Summits in 1996 and 2001. Food security exists when
all people, at all times, have physical and economic access to suffi-
cient, safe and nutritious food to meet their dietary needs and food
preferences for an active and healthy life. As noted by Rukuni
(2002), food security at the household level is a balance between
availability of and access to sufficient food.
Barrett et al. (2001) have noted that one of the possible path-
ways out of the vicious circle of food insecurity in sub-Saharan
Africa is the promotion and establishments of non-farm work in
the rural sector. Evidence provided by Haggblade et al. (2002) sug-
gests that most rural communities in Africa derive about 42% of
q
The authors thank two anonymous reviewers and the journal editor for very
useful comments and suggestions on an earlier draft. The authors thank the German
Research Foundation for financial support for the data collection. The first author is
grateful to the Kiel Institute for World Economy for financial assistance.
⇑ Corresponding author. Address: Department of Food Economics and Consump-
tion Studies, University of Kiel, Olshausenstrasse 40, 24118 Kiel, Germany. Tel.: +49
431 880 4426; fax: +49 (0) 431 880 7308.
E-mail address: aabdula@food-econ.uni-kiel.de (A. Abdulai).
their income from rural non-farm activities – a high share consid-
ering that only about 10% of the rural labor force is employed in the
rural non-farm sector. Non-farm work offers the poor a potential
escape route from poverty, since they usually require little capital
or training to set up and are labor intensive. The extra income from
agricultural growth can create demand for these goods and ser-
vices, thus starting a virtuous cycle in which agricultural and rural
off-farm income grow and sustain each other’s growth (Stamoulis
and Zezza, 2003).
Several studies have examined the nature and determinants of
non-farm work in rural areas of developing countries (Abdulai
and Delgado, 1999; Abdulai and CroleRees, 2001; Barrett et al.,
2001; Canagarajah et al., 2001). Studies examining the impacts of
non-farm income on household incomes have focused on the in-
come-equity effects of non-farm income (e.g., Deininger and Olin-
to, 2001). However, work on the direct impact of non-farm work on
household income and food security is quite scarce (Lanjouw,
2001; Holden et al., 2004; Chang and Mishra, 2008). Moreover,
most of the studies that have examined the relationship between
non-farm work and household income have normally analyzed
correlations rather than causal effects (e.g., Lanjouw, 2001). Using
bio-economic modelling, Holden et al. (2004) found that better ac-
cess to low-wage non-farm income has a substantial positive effect
on household income.
This study contributes to the literature by empirically examin-
ing the impacts of non-farm work on household income and food
security status, using a sample of farm households in Northern
Ghana. We employ propensity score matching method to control
for self-selection that normally arises when participation in

0306-9192/$ - see front matter Ó 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.foodpol.2010.09.002
 V. Owusu et al. / Food Policy 36 (2011) 108–118
non-farm work is not randomly assigned and self-selection into
participation occurs. By explicitly considering the causal relation-
ship between participation in non-farm work and household wel-
fare, the paper seeks to address counterfactual questions that
may be significant in predicting the impacts of policy changes.
We estimate separately for male and female-headed households
to account for gender differences in the impact of participation in
non-farm work.
The remainder of the paper is organized as follows: Section 2
discusses non-farm work and food security in Ghana. Section 3
outlines the conceptual framework and empirical procedure, and
the propensity score and treatment effects. Section 4 presents
the data used in the empirical analysis. Section 5 discusses the
empirical results, while the final section provides some concluding
remarks.
Non-farm work and food security in Ghana
Ghana has been characterized over the years by regional
inequality in terms of wealth and resource endowments that is
basically geographical and political (Shepherd et al., 2004). The
northern part of Ghana which is predominately of savannah veg-
etation is associated with extremely poor quality soils, short uni-
modal rainfall season and periodic drought (Dickson and Benneh,
1988). This situation contrasts with the natural soil fertility and
bimodal rainfall seasons of the southern part of the country. Cou-
pled with these adverse environmental conditions of Northern
Ghana is the poor access to markets and well functioning finan-
cial institutions. These conditions have contributed to a higher
level of food insecurity in the region (Whitehead, 2006). The re-
gion has actually remained the poorest in terms of living stan-
dards, literacy levels, health, and nutrition status for several
decades (Whitehead, 2006).
Although poverty levels have declined in the country over the
last decade, progress has been much slower among food crop farm-
ers than for other livelihood groups (Devereux, 2008). In particular,
rural households in the north suffer seasonal strains in well-being
and seasonal pressures are found to be worst where the house-
holds face declining food stocks. Despite the efforts by policy mak-
ers to combat poverty by improving farmers’ access to improved
technology, poverty remains prevalent in the region. Devereux
(2008) points out that the ‘poorest’ groups in Northern Ghana
who are normally vulnerable to shocks such as drought, bush fire,
and loss of animals may no longer engage in agriculture at all and
for that matter struggle to obtain enough food, especially during
the ‘hungry season’ months of the year.1 The ‘less poor’ who are
more dependent on agriculture than the ‘poorest’ or the ‘vulnerable’
may also face land and labor input constraints that limit their ability
to accumulate enough capital. As a recently conducted survey by
Ghana’s Ministry of Food and Agriculture (MoFA) revealed, the ‘less
poor’ tend to pursue a ‘survival strategy’ rather than a ‘development
strategy’.2
As noted by Ashong and Smith (2001), most rural households in
Ghana adopt various livelihood strategies in order to overcome
1
The ‘‘hungrier season” months in Northern Ghana as indicated by Devereux
(2008) is between March and July but from January, less food-endowed households
have started experiencing food shortages.
2
A ‘development strategy’ as noted by Devereux (2008) is based on savings
through livestock (with resources acquired from crop sales or livestock husbandry),
leading to investment in both agricultural and non-farm livelihood activities. Most
households in this group have adequate labor capacity, so are responsive to
commercial farming opportunities. When the ‘poorest’ households are hit by a shock,
they are forced to adopt ‘survival strategies’ that include the sale of assets (livestock);
reduction in food intake; engaging in petty trade; migration; withdrawal of children
from school; self-medication; and reliance on families, community-based organiza-
tions or NGOs for assistance.
109
food poverty. This livelihood strategy has been widely documented
for other parts of the world by several authors (Barrett et al., 2001;
Lanjouw and Feder, 2001; Reardon et al., 1998; Reardon et al.,
2001). Available evidence suggests that rural non-farm income
represents on average 42% of rural income in Africa, 32% in Asia,
40% in Latin America and 44% in Eastern Europe (FAO, 1998; Davis,
2004). Canagarajah et al. (2001) found in Ghana that participation
in non-farm activities increased more rapidly for married women
and female-headed households than for men and asserted that wo-
men are able to combine agriculture and non-farm employment as
a way out of poverty and household food insecurity.
Gladwin et al. (2001) have noted that addressing food insecurity
in Africa through increased food production may be inadequate so
efforts must be geared toward enhancing farmers’ access to addi-
tional income through non-farm employment. Rural non-farm
enterprises promotion is one of the Government’s poverty reduc-
tion strategies set out in the Ghana Poverty Reduction Strategy
Paper II (MoFaEP, 2003). The activities of Non-Governmental
Organisations are complementary to these efforts of the govern-
ment in the promotion of rural non-farm enterprise as a livelihood
strategy for enhancing food security in rural areas of Northern
Ghana.3 The non-farm activities include agro-processing, commerce,
transport services, charcoal production, firewood gathering, repair
services, wage work, and seasonal migration, among others. Agro-
processing, which is mostly carried out by women is generally pur-
sued through traditional methods and on very small-scale bases.
These activities generally include processing of sheanuts, ground-
nuts, rice, cotton ginnery, and soap manufacturing. Other activities
include trading in foodstuff such as maize, beans, rice and other
grains, sand winning, the bulk of which is used for construction work
in Tamale Metropolis and Fishing along the Black Volta (District Pro-
file, 2006).
Conceptual framework and empirical procedure
The model employed is essentially the one suggested by Huff-
man (1991), where farm households allocate their time to individ-
ual activities including non-farm employment. A farm household is
assumed to maximize a utility function defined over consumption
of goods Q and leisure, H, i.e., U = U(Q, H). Utility is maximized sub-
ject to time, budget, production, and non-negativity constraints.
The time constraint is T = L1 + L2 + H, where T is total time endow-
ment, L1 and L2 are respectively time allocated to farm work and
non-farm work, and H is leisure as defined above. The budget con-
straint on household cash income can be expressed as
PQ ¼ p1 y1  w1 L1 þ w2 L2 þ R ð1Þ
where P is the price for the consumption good purchased in the
market, w1 and w2 denote returns to labor from farm work and
non-farm work, respectively, y1 and p1 are annual quantity of farm
output produced and sold and price for farm output, respectively
and R represent non-labor income.
The first order condition for optimal time allocation for farm
work, non-farm work and leisure is given as oU/oLi = wioU/
oQ  oU/oL = 0. This first order condition can be rearranged to ob-
tain the returns to labor from farm work and non-farm work:
wi = (oU/oL)/(oU/(oQ). When farm households allocate their time
to the three activities, the labor supply functions for farm work
and non-farm work can be derived as
L1 ¼ L1 ðw1 ; w2 ; p1 ; p2 ; ZÞ ð2Þ
3
Active NGOs in Northern Ghana who promote rural non-farm enterprises as a
means of ensuring food security include the Catholic Relief Services, Opportunities
Industrialization Centre (O.I.C), ACTION Aid-Ghana, Danish International Develop-
ment Agency, Ghana Danish Community Project, TECHNOserve and NEWENERGY.
110 V. Owusu et al. / Food Policy 36 (2011) 108–118

L2 ¼ L2 ðw1 ; w2 ; p1 ; p2 ; R; ZÞ ð3Þ However, Jalan and Ravallion (2003) argue that the assumption
of selection on observables is no more restrictive than assuming
where Z summarises household and location characteristics that
away problems of weak instruments, when Heckman two-step or
influence the individual’s reservation and non-farm wages. As noted
the IV approach is employed in cross-sectional data analysis.
by Huffman (1991), a positive number of non-farm hours will be
To address the selectivity bias problems associated with non-
observed for an individual i, if the potential market wage (wm i ) is
farm employment participation, we employ matching techniques
greater than the reservation wage (wri ).4 Thus, Li = 1 if wm i > wi
r

m r in assessing the impact of non-farm employment on household in-

and Li = 0 if wi 6 wi . However, these differential wages are not ob-
servable. What is observed is the decision to participate, or not to
participate in non-farm work. This decision can be specified as an in-
dex function, with unobserved variable,
Li ¼ bZ 0i þ li
Li ¼ 1 if Li > 0
Li ¼ 0 if Li 6 0
where li is the random disturbance term.
To analyze the relationship between participation in non-farm
work and outcomes such as household income and food security
status, we start from the linear function
Y i ¼ ki þ ai X 0i þ di Li þ ei
come and food security status (Dehejia and Wahba, 2002). The pro-
pensity score matching approach addresses the problem of the
limited distributional assumption of the errors, and more impor-
tantly allows for a decomposition of the treatment effect on out-
comes (Rosenbaum and Rubin, 1983; Heckman et al., 1999). Also
ð4Þ the counterfactual framework could detect ‘‘two important sources
of bias in the estimation of treatment effects. These include the ini-
tial differences between non-farm work participants and non-par-
ticipants in the absence of treatment, and the difference between
the two groups in the potential effect of the treatment (Winship
and Morgan, 1999).
ð5Þ The propensity score and treatment effects

where Yi is household income or food security status, L denotes a The propensity score p(Zi) is defined as the conditional probabil-
dummy variable representing one, if an individual participates in ity of participating in non-farm work given pre-participation
non-farm work and zero otherwise; X 0i is a vector of personal and characteristics:
household characteristics and assets, and location characteristics,
ki is a vector of unknown parameters, and ei is a random error term. pðZ i Þ  Pr½Li ¼ jZ i  ¼ E½Li jZ i ; pðZ i Þ ¼ FfhðZ i Þg ð6Þ
The specification above in Eq. (5) treats participation in non-
where Li = (0, 1) is the indicator of non-farm work participation and
farm work as an exogenous variable on the premise that house-
Zi denotes a vector of pre-participation characteristics, and F{  } can
holds participate in non-farm work to increase their income or im-
be a normal or logistic cumulative distribution. The propensity
prove their food security status. However, this need not be the
score can be predicted with either the logit or probit model (Hujer
case, since wealthier households may be better disposed to partic-
et al., 2004; Sianesi, 2004; Faltermeier and Abdulai, 2009).5
ipate in non-farm work. Moreover, the decision to participate or
The predicted propensity scores can then be used to estimate
not to participate in non-farm employment may be dependent
treatment effects. The most common treatment effects in the eval-
on the benefits from participation itself. Thus, participation in
uation literature include the Average Treatment Effect (ATE) which
non-farm work is not random, with the group of participants being
captures the treatment effect for the whole sample, Average Treat-
systematically different. Specifically, selection bias occurs if unob-
ment Effect on the Treated (ATT) or the participation effect, and the
servable factors influence both the error term (l) of the participa-
Average Treatment Effect on the Untreated (ATU). Becker and Ich-
tion Eq. (4), and the error term (e) of the income Eq. (5), thus
ino (2002) indicate that the parameter of interest in the estimation
resulting in correlation of the error terms.
of the propensity score is the Average Treatment Effect on the Trea-
When correlation between the error terms occurs, estimating
ted (ATT). However, under the assumption of unconfoundedness,
Eq. (5) with ordinary least squares method results in biased esti-
Titus (2007) and Millimet and Tchernis (2008) point out that an
mates. Heckman two-step approach has been mostly employed
appropriate approach of evaluating policy-relevant outcomes in a
to address this selection bias. However, the approach depends on
counterfactual framework is to examine not only the ATT, but also
the restrictive assumption of normally distributed errors. An alter-
the Average Treatment Effect on the Untreated (ATU), which cap-
native way of controlling for selection bias is to use instrumental
tures the effect of treatment on individuals who do not participate
variable (IV) method. A major limitation of the approach is the dif-
in non-farm work.
ficulty in finding identifying instruments in the estimation. In addi-
Given the propensity score p(Zi), the three effects are evaluated
tion to these limitations, both OLS and IV procedures tend to
as:
impose a linear functional form assumption, implying that the
coefficients on the control variables are similar for participants ATE ¼ E½EfY 1i jLi ¼ 1; pðZ i Þg  EfY 0i jLi ¼ 0; PðZ i Þg ð7Þ
and non-participants. However, this assumption may not hold,
since the coefficients could differ (Jalan and Ravallion, 2003). ATT ¼ E½EfY 1i jLi ¼ 1; pðZ i Þg  EfY 0i jLi ¼ 0; PðZ i ÞgjLi ¼ 1 ð8Þ
Unlike the parametric methods mentioned above, propensity
score matching, which is employed in the present study, requires
ATU ¼ E½EfY 1i jLi ¼ 1; pðZ i Þg  EfY 0i jLi ¼ 0; PðZ i ÞgjLi ¼ 0 ð9Þ
no assumption about the functional form in specifying the rela-
tionship between outcomes and predictors of outcome. The draw- where Y 1i
and Y 0i
are the two counterfactual outcomes of participa-
back of the approach is the Conditional Independence Assumption tion and non-participation in non-farm employment.
(CIA), which states that for a given set of covariates, participation is A number of matching algorithms have been suggested in the
independent of potential outcomes. Smith and Todd (2005) rightly literature to match participants and non-participants of similar
note that there may be systematic differences between the out- propensity scores. The most widely employed algorithms include
comes of participants and non-participants, even after condition- the nearest neighbor matching, caliper matching, and the kernel
ing on observables. Such differences may arise because of matching methods. The nearest neighbor, which matches each
selection into treatment based on unmeasured characteristics. participant with its closest neighbor with similar observed

4 5
The reservation wage for non-farm work is the marginal value of the individual’s Other studies have also employed the logistic model in the estimation of the
time when all of it is allocated to farm and leisure. propensity scores (Hirano and Imbens, 2001; Caliendo and Kopeinig, 2005).
 V. Owusu et al. / Food Policy 36 (2011) 108–118
characteristics, can be done either with replacement or without
replacement. Matching with replacement results in bias reduction
since each treatment group can be matched to the nearest compar-
ison group as a result of a reduction in the propensity score dis-
tance.6 Kernel matching tends to use more non-participants for
each participant, thereby reducing the variance but possibly increas-
ing the bias. The caliper matching, besides using the nearest neigh-
bor within each maximum propensity score distance, can also use
all the comparison members within the caliper. This method is em-
ployed in the present study because of this advantage.
For robust estimation of the propensity score, a balancing prop-
erty which is a function of the relevant observed covariates must
be satisfied.7 This property implies that conditional on the propen-
sity score, each individual should have the same probability of par-
ticipating in non-farm work as in a randomized experiment. As
noted by Hujer et al. (2004), the distribution of Zi is expected to be
balanced in the two samples if this balancing property is satisfied.
Another relevant assumption for robust estimation of the p-score
is to satisfy the common support condition (Heckman et al., 1999).
This requires that individuals with the same covariates Z should
have positive probabilities of being both participants and non-partic-
ipants in non-farm work, implying that all individuals in the com-
mon support region can actually participate in all states
(0 < PðL ¼ 1jZÞ < 1). Smith and Todd (2005) point out that if there
are regions where the support of Z does not overlap for the differ-
ent groups, matching is only justified when performed over the
common support region and the estimated treatment effect must
be redefined as the treatment impact for participants whose prob-
abilities lie within the overlapping support region. Given the pro-
pensity score, the Conditional Independence Assumption (CIA)
must also be satisfied.8 This states that once the set of observable
characteristics, Zi, are controlled for, the treatment variable (non-
farm work participation), and the outcome variables (household in-
come and food security) should be uncorrelated.
For the standardized bias approach proposed by Rosenbaum
and Rubin (1985), the quality of matches is assessed by comparing
the situation before and after matching to check if there remain
any differences after conditioning on the propensity score.9 Sianesi
(2004) has also recommended an additional assessment of the
matching quality which requires the re-estimation of p-score of
matched participants and matched non-participants. The matching
procedure balances the covariates very well if the pseudo-R2 after
matching is fairly low, while the probability of the F-statistics is
not significantly different from zero. As observed by Hujer et al.
(2004), a possible hidden bias might occur if there are unobserved
variables that tend to influence simultaneously non-farm work par-
ticipation and household income and food security status. Given that
it is not possible to estimate the magnitude of selection bias with
non-experimental data, Rosenbaum (2002) has suggested the use
of the bounding approach to examine the influence of unmeasured
variables on the selection process.10
6
When there are few comparison groups similar to treated groups, one may be
compelled to match treated groups to comparison groups that are not even similar in
terms of p-scores, when matching is done without replacements. There is also the
possibility of encountering bad matches, if the closest neighbor is far away (Dehejia
and Wahba, 2002).
7
The balancing property is specified as L ? ZjpðZÞ.
8
This is often referred to as unconfoundedness expressed as Y 1 ; Y 0 ? LjZ )
Y ; Y 0 ? LjpðZÞ.
1 12
9
As observed by Smith and Todd (2005), there is either failure of conditional
independence assumption (CIA) or mis-specification in the model used for the p-
score-estimation if after conditioning on the propensity score, there is still depen-
dence on Z.
10
This method is well documented in Rosenbaum (2002) and Imbens and
Wooldridge (2009).
111
Data description
The data employed in this study come from a recent household
survey conducted during 2007 in 10 rural communities – Bung-
lung, Challam, Kpendua, Fazihini, Kadia, Kanshegu, Laligu, Tari-
kpaa, Zion and Tibale in the Savelugu-Nanton district of Northern
Ghana. The district is mainly an agriculture-based economy
employing about 97% of the economically active population. Save-
lugu-Nanton district consists of 143 communities out of which 10
communities were randomly selected for the survey. Through
informal focus group meetings with community leaders and mem-
bers of farmer-based organizations in the 10 survey sites, 744
male-headed and 300 female-headed farm households were iden-
tified. A random sampling approach was then used to select 150
households from each of the male and female-headed households
making a total sample size of 300 households. Information from
the households was gathered through interviews with question-
naires. The data covered information on farm and cash-oriented
non-farm activities, demographic characteristics, as well as market
and resource access.
The savannah vegetation of the region coupled with the single
rainy season and long dry season often result in shortfalls in agri-
cultural production. This condition compels farmers to search for
additional sources of income to supplement their unstable agricul-
tural incomes. The predominant cash-oriented non-farm work en-
gaged by the sampled individuals includes cotton ginnery, soap
manufacturing, trading in foodstuffs, and small-scale agro-process-
ing of sheanuts and groundnuts. Females mostly engaged in small-
scale processing of sheanuts and groundnuts.
The dependent variable used in the study is a dummy variable
that takes the value of one, if the household participated in cash-
oriented non-farm work, and the value zero, if no participation
was recorded. The outcome variables used in this study are total
household income and two binary indicators of household food
security status. The household income was measured as the total
income from cash-oriented non-farm work, farm work, livestock
sales and transfers to the household in 2007. Two food security
variables that have been suggested in the literature are employed
in the analysis. Both measures are used to ascertain whether the
results are sensitive to the indicator employed (Stamoulis and Zez-
za, 2003; Smith and Wiesmann, 2007; Devereux, 2008). One of the
food security indicators captured food availability and was mea-
sured as a binary indicator that takes the value of one, if the house-
hold does not mortgage its standing field crops for current
consumption (MSFC) during the farming season in 2007, and zero
otherwise.11 The other food security indicator captures food avail-
ability and access by the household. It is actually termed as food
insecurity, and was measured as an indicator that takes the value
one, if the household’s harvested food stock declines during critical
periods of food shortages (DHC16) in 2007, and zero otherwise.12
As a livelihood strategy, most rural farm households in Northern
Ghana participate in non-farm activities as alternative sources of
income generation. This tends to cushion them against the effects
of food crop shortages particularly during the first sixth months
of the year, that normally arises as a result of low productivity
11
An individual facing acute food shortages in Northern Ghana mortgages his or her
standing field crops for current consumption by using the standing field crops as
collateral to obtain food supplies from food endowed individuals with the promise of
settling the food deficit when standing field crops are harvested.
The critical periods of household food declines and shortages in Northern Ghana
occur in the first sixth month of every year. Another food security indicator is the
ability of the household to meet nutritional requirements (Stamoulis and Zezza,
2003). Household-level food security also implies household daily food energy
availability per capita, whether a household is food energy deficient, household diet
diversity, whether a household has low diet diversity, and the percent of available
food energy derived from staples (Smith and Wiesmann, 2007).
112 V. Owusu et al. / Food Policy 36 (2011) 108–118

Table 1
Descriptive statistics for male’s non-farm employment participation.

Variable name Variable definition Participants Non-participants Difference

N = 90 (30%) N = 210 (70%) in means
Mean S.d Mean S.d
Treatment variable
MNFARM 1 if male participates in non-farm employment, 0 otherwise
Outcome variables
HHINC Household income (¢/million) 10.85 8.93 6.09 5.43 4.76**
MSFC Food security (1 if household does not mortgage its standing field 0.89 0.32 0.68 0.47 0.21**
crops for current consumption, 0 otherwise).
DHC16 Food insecurity (1 if household harvested food stock decline during 0.42 0.49 0.38 0.48 0.04***
critical periods of food shortages, 0 otherwise).
Independent variables
Household characteristics
MAGE Age of male (in years) 50.42 11.99 55.04 15.17 4.62
MEDUC Years of formal education of male 2.71 4.23 0.75 2.61 1.96***
GPMEMB 1 if individual is a member of village group, 0 otherwise 0.71 0.46 0.53 0.50 0.18
PRCLS3YR 1 if there is presence of children less than 3 years old, 0 otherwise 0.80 0.40 0.72 0.45 0.08*
HHSIZE Household size 10.27 4.95 9.06 4.53 1.21**
DPRATIO Dependency ratio 0.99 0.53 0.95 0.56 0.04
MIGRATN Number of migrated household members 1.07 1.50 1.05 1.40 0.02
CRACCES 1 if individual has access to credit, 0 otherwise 0.44 0.50 0.12 0.50 0.32**

Household assets
IFBIKE 1if individual possess bicycle, 0 otherwise 0.99 0.15 0.98 0.14 0.01
TRACTA 1 if household possesses tractor, 0 otherwise 0.16 0.37 0.04 0.19 0.12*
IFCATTLE 1 if individual possesses cattle, 0 otherwise 0.60 0.50 0.30 0.46 0.30***
IFGOAT 1 if individual possesses goat, 0 otherwise 0.89 0.32 0.80 0.40 0.09**
IFGFWL 1 if individual possesses fowl, 0 otherwise 0.64 0.48 0.58 0.49 0.06

Location dummies
DBUNGLUN 1 if individual is located at Bunglung, 0 otherwise 0.16 0.37 0.08 0.27
DTARIPKA 1 if individual is located at Taripka, 0 otherwise 0.11 0.32 0.10 0.29
DFAZIHIN 1 if individual is located at Fazihini, 0 otherwise 0.16 0.37 0.08 0.27
DLALIGU 1 if individual is located at Laligu, 0 otherwise 0.02 0.15 0.13 0.34
DKPENDUA 1 if individual is located at Kpendua, 0 otherwise 0.07 0.25 0.11 0.32
DKANSHEGU 1 if individual is located at Kanshegu, 0 otherwise 0.16 0.37 0.08 0.27
DCHALLAM 1 if individual is located at Challam, 0 otherwise 0.04 0.21 0.12 0.33
DTIBALE 1 if individual is located at Tibale, 0 otherwise 0.04 0.21 0.12 0.33
DKADIA 1 if individual is located at Kadia, 0 otherwise 0.11 0.32 0.10 0.29
DZION 1 if individual is located at Zion, 0 otherwise 0.13 0.34 0.09 0.28

Household income in millions of Old Ghanaian Cedi (¢). Exchange rate: US $1 = ¢9457 in 2007.
*
Denotes significant at 10%.
**
Denotes significant at 5%.
***
Denotes significant at 1%.

and crop harvest failures. Income from non-farm work assists rural
households’ to smoothen their consumption when self-produced
food crops fail to suffice for the whole year and to ensure food secu-
rity. Participation in non-farm work therefore helps rural house-
holds in Ghana to enhance their food security status, or reduce
their food insecurity.
Tables 1 and 2 present the definitions and sample statistics of
the variables used in the analysis for males and females, respec-
tively. The observed mean difference of 0.48 in the effects of treat-
ment for males (0.30) and females (0.78) is statistically significant
at 1% level indicating the presence of gender heterogeneous treat-
ment effects. The difference in rates of participation between males
and females reflects the fact that males in the area are more en-
gaged in farming activities, while females are predominantly en-
gaged in non-farm activities.13 Also presented in the Tables are
differences in means of the variables used in the matching analyses
for both male and female participants, alongside their significance
levels. The significance levels suggest that there are some differences
between participants and non-participants with respect to house-
hold and farm-level characteristics. With regards to the outcome
13
As noted by an anonymous reviewer, another empirical strategy of testing the
presence of heterogeneous treatment effects is to fit a regression model which
depends on household characteristics including gender.
variables, there appear to be statistically significant differences in
household income and food security status between male partici-
pants and non-participants. Although there are differences between
female participants and non-participants, there is only a statistically
significant difference in food insecurity status. There are also signif-
icant differences in education, household size and access to credit, as
well as household assets.
Quite interesting is the significant difference between partici-
pants and non-participants regarding access to credit for both
males and females. For males, 44% of participants and 12% of
non-participants had access to formal credit, while the correspond-
ing figures for females were 47% and 27%, respectively, revealing
the low levels of credit availability to rural farm households. As ar-
gued by Reardon et al. (1994), poor households who lack access to
credit may be handicapped by limited access to non-farm income.
There are also significant differences between participants and
non-participants in terms of education. On average, participants
tend to have a higher number of years of formal education than
non-participants. Reardon (1997) points out that education tends
to be correlated with ability to mobilize capital through non-farm
work. Although it may appear that basic technical skills are nor-
mally acquired outside the formal school system, the broader skills
of reading, writing and numeracy are acquired within it, making
schooling an important determinant of participation in non-farm
work (Norcliffe, 1983).
 V. Owusu et al. / Food Policy 36 (2011) 108–118 113

Table 2
Descriptive statistics for female’s non-farm employment participation.

Variable name Variable definition Participants Non-participants Difference

N = 234 (78%) N = 66 (22%) in means
Mean S.d Mean S.d
Treatment variable
FNFARM 1 if female participates in non-farm employment, 0 otherwise

Outcome variables
HHINC Household income (¢/million) 10.84 6.72 8.93 5.43 0.91
MSFC Food security (1 if household does not mortgage its standing field 0.73 0.45 0.79 0.42 0.06
crops for current consumption, 0 otherwise).
DHC16 Food insecurity (1 if household harvested food stock decline 0.40 0.49 0.36 0.49 0.04**
during critical periods of food shortages, 0 otherwise).

Independent variables
Household characteristics
FMAGE Age of female (in years) 40.03 9.56 43.00 12.24 2.97*
FMEDUC Years of formal education of female 0.73 2.32 0.18 1.04 0.55***
GPMEMB 1 if individual is a member of village group, 0 otherwise 0.60 0.49 0.55 0.51 0.05
PRCLS3YR 1 if there is presence of children less than 3 years old, 0 otherwise 0.76 0.43 0.70 0.47 0.06
HHSIZE Household size 9.97 4.74 7.48 3.94 2.49**
DPRATIO Dependency ratio 0.91 0.49 1.14 0.71 0.23**
MIGRATN Number of migrated household members 1.03 1.19 1.15 2.08 0.12
CRACCES 1 if individual has access to credit, 0 otherwise 0.47 0.50 0.27 0.45 0.20***

Household assets
IFBIKE 1if individual possess bicycle, 0 otherwise 0.98 0.13 0.97 0.17 0.01
TRACTA 1 if household possesses tractor, 0 otherwise 0.09 0.28 0.03 0.17 0.06
IFCATTLE 1 if individual possesses cattle, 0 otherwise 0.40 0.49 0.36 0.49 0.04
IFGOAT 1 if individual possesses goat, 0 otherwise 0.81 0.39 0.86 0.33 0.05
IFGFWL 1 if individual possesses fowl, 0 otherwise 0.61 0.49 0.58 0.50 0.03

Location dummies
DBUNGLUN 1 if individual is located at Bunglung, 0 otherwise 0.10 0.30 0.09 0.29
DTARIPKA 1 if individual is located at Taripka, 0 otherwise 0.10 0.30 0.09 0.29
DFAZIHIN 1 if individual is located at Fazihini, 0 otherwise 0.11 0.32 0.06 0.24
DLALIGU 1 if individual is located at Laligu, 0 otherwise 0.12 0.33 0.03 0.17
DKPENDUA 1 if individual is located at Kpendua, 0 otherwise 0.06 0.24 0.24 0.44
DKANSHEGU 1 if individual is located at Kanshegu, 0 otherwise 0.12 0.33 0.03 0.17
DCHALLAM 1 if individual is located at Challam, 0 otherwise 0.09 0.29 0.12 0.33
DTIBALE 1 if individual is located at Tibale, 0 otherwise 0.11 0.32 0.06 0.24
DKADIA 1 if individual is located at Kadia, 0 otherwise 0.08 0.27 0.18 0.39
DZION 1 if individual is located at Zion, 0 otherwise 0.10 0.30 0.09 0.29

Household income in millions of Old Ghanaian Cedi (¢). Exchange rate: US $1 = ¢9457 in 2007.
*
Denotes significant at 10%.
**
Denotes significant at 5%.
***
Denotes significant at 1%.

The discussion of the differences between participants and non-
participants from Tables 1 and 2 centered on mean differences in
the outcome variables and other household and farm-level vari-
ables. However, these comparisons of mean differences do not ac-
count for the effect of other characteristics of farm households, and
as such may confound the impact of participation in non-farm
work on household income and food security status with the influ-
ence of other characteristics. Multivariate approaches that account
for selection bias arising from the fact that participants and non-
participants may be systematically different are essential in pro-
viding sound estimates of the impact of participation on household
income and food security.
The independent variables used in the probit regression models
to predict the propensity scores were based on past research on
determinants of participation in non-farm employment (Abdulai
and Delgado, 1999; Barrett et al., 2001). These variables include
household characteristics such as age to capture experience, and
education of the household head to present productivity potential,
household size, access to credit to capture liquidity constraints,
dependency ratio, number of migrants from household, household
assets, presence of children, and location characteristics to capture
community fixed effects.
Empirical results
The propensity scores were estimated with a probit model.14
The results of the propensity score estimates for male and female
participants are reported in Tables A1 and A2 in the appendix. The
propensity scores only serve as a device to balance the observed dis-
tribution of covariates across the treated and the untreated groups
(Lee, 2008). A detailed interpretation of the propensity score esti-
mates is not undertaken in this study. However, as the results show,
most of the variables included in the estimations have the expected
signs. In particular, education and access to credit are found to be
positively and significantly related to participation in non-farm
work. The common support condition was imposed and the balanc-
ing property was satisfied in all the estimated regression models.
The distribution of propensity scores before and after matching as
shown in Fig. 1 clearly indicate that estimating the p-score appears
to balance the treated and untreated groups extremely well, a result
which underscores the relevance of the propensity score matching
approach.
14
All specifications were estimated using the econometric software package STATA.
114 V. Owusu et al. / Food Policy 36 (2011) 108–118

Male’s non-farm employment participation

Unmatched Matched Unmatched Matched

0 .2 .4 .6 .8 1 0 .2 .4 .6 .8
0 .2 .4 .6 .8 1 0 .2 .4 .6 .8 Propensity Score Propensity Score
Propensity Score Propensity Score
Untreated Treated: On support Untreated Treated: On support
Untreated Treated Untreated Treated Treated: Off support Treated: Off support

Impact on MSFC Impact on DHC16

Female’s non-farm employment participation
Unmatched Matched Unmatched Matched

0 .2 .4 .6 .8 1 0 .2 .4 .6 .8 1 0 .2 .4 .6 .8 1 .2 .4 .6 .8 1
Propensity Score Propensity Score Propensity Score Propensity Score
Untreated Treated: On support Untreated Treated: On support Untreated Treated: On support Untreated Treated: On support

Treated: Off support Treated: Off support Treated: Off support Treated: Off support

Impact on MSFC Impact on DHC16

MSFC is food security where the household does not mortgage its standing field crops for current consumption.
DHC16 denotes food insecurity where household harvested crops declines during critical periods of food shortages.
Fig. 1. Distribution of propensity scores for unmatched and matched samples.

Table 3
Treatment effects and sensitivity analysis.

Outcome indicators Caliper PSM Critical value of Treated Control

C (hidden bias)
ATE ATU ATT On-support Off-support On-support Off-support
Males HHINC 0.5 3.2461** 3.3652*** 3.4679** 1.65 90 – 210 
(2.11) (2.60) (2.13)
MSFC 0.5 0.1839** 0.1722** 0.2115*** 1.75 90 – 210 
(2.04) (2.27) (3.065)
DHC16 0.002 0.0825* 0.0417** 0.1717** 2.05 26 64 210 
(1.67) (2.02) (2.05)
Females HHINC 0.5 2.4479** 1.7010*** 2.6586** 2.95 234 – 66 
(2.10) (2.46) (2.15)
MSFC 0.005 0.0657** 0.0599** 0.0673** 2.00 44 190 66 
(1.98) (2.00) (1.99)
DHC16 0.002 0.3000 0.2500 0.3333** 1.25 20 214 66 
(0.88) (0.95) (2.07)

Notes: t-statistics are in parentheses.

Critical values of C are presented for average treatment effects on the treated (ATT).
Outcome indicators:
HHINC denotes household income.
MSFC is food security where the household does not mortgage its standing field crops for current consumption.
DHC16 denotes food insecurity where household harvested crops declines during critical periods of food shortages.
*
Denotes significant at 10%.
**
Denotes significant at 5%.
***
Denotes significant at 1%.

The results of the treatment effects (ATE, ATT and ATU) for both robust to the matching algorithm employed in the analysis, we also
male-headed and female-headed households, all estimated by the employed nearest neighbor and kernel based matching models. The
caliper matching method are presented in Table 3, while the indi- results from these estimators, which are presented in Table 3A in
cators of matching quality are provided in Table 4. All the matching the appendix, generally indicate that our results are robust to the
techniques produced consistent estimates of the treatment effects matching algorithm employed. Focusing first on the ATT in Table 3,
of participating in non-farm work. To ascertain if the results are the matching estimates reported in Table 3 shows that for both
 V. Owusu et al. / Food Policy 36 (2011) 108–118 115

Table 4
Indicators of matching quality before matching and after matching.

Outcome indicator Caliper Pseudo-R2 Pseudo-R2 p-Valuea p-Valuea Mean absolute bias Mean absolute Absolute bias
(unmatched) (matched) (unmatched) (matched) (unmatched) bias (matched) reduction
Males HHINC 0.5 0.3171 0.0521 0.0000 0.1794 18.2501 5.3513 70.6781
MSFC 0.5 0.3184 0.0525 0.0000 0.1907 18.3530 6.0132 67.2359
DHC16 0.002 0.3161 0.0422 0.0000 0.1654 14.5946 7.5696 48.1341
Females HHINC 0.5 0.2884 0.0237 0.0006 0.4416 21.7627 4.8733 77.6069
MSFC 0.005 0.2885 0.0067 0.0009 0.2440 22.3500 10.8076 51.6438
DHC16 0.002 0.2960 0.0469 0.0004 0.1893 21.7247 7.5860 65.0811

Note: Pseudo-R2 from probit estimation indicates the goodness of fit or how well the regressors explain the probability to participate in an employment activity.
Standardized bias:
Unmatched, MABUM ¼ 100  ðZ ~ 0 Þð1 ðV 1 ðZÞ þ V 0 ðZÞÞÞ12 ; Matched, MABM ¼ 100  ðZ
~1  Z ~ 0 Þð1 ðV 1M ðZÞ þ V 0M ðZÞÞÞ12 .
~1  Z
2 2

Total bias reduction: BRT = 100(1  MABM/MABUM).

a
p-Value of likelihood ratio test (Pr > v2).

female-headed and male-headed households, participation in non- Table A2

farm employment exerts positive and significant impacts on Probit estimates of propensity score for female’s non-farm employment participation.
household income and food security status, indicating that
Variable Coefficient Standard error z-Value Probability
participation in non-farm work helped raise households’ income
and thereby increasing their probability of not mortgaging Household characteristics
FMAGE 0.1231 0.097 1.27 0.205
their standing crops for current consumption (MSFC). Specifi- FMAGE2/100 0.1727 0.109 1.58 0.113
cally, the ATT effects of 3.46 for males and 2.65 for females FMEDUC 0.2321 0.137 1.70 0.090
indicate that males’ participation result in an increase in household PRCLS3YR 0.7467 0.387 1.93 0.054
income by about ¢3467,900 (US$367), while the females’ participa- HHSIZE 0.1178 0.046 2.57 0.010
DEPRATIO 0.6659 0.298 2.24 0.025
tion tend to increase household income by about ¢2658,600
MIGRATN 0.3978 0.143 2.78 0.005
(US$281). GPMEMB 0.0671 0.392 0.17 0.864
The effect of non-farm employment participation on the decline CDACCES 0.3960 0.237 1.67 0.093
of household food stocks during critical periods of food shortages
(DHC16) was found to be negative and statistically significant, Household assets
again implying that the increased household income from non- TRACTA 0.3058 0.799 0.38 0.702
farm work helped in lowering the probability of household food IFCATTLE 0.0624 0.383 0.16 0.871
IFGOAT 0.5747 0.459 1.25 0.211
IFGNFWL 0.2027 0.329 0.62 0.538
IFBIKE 0.2366 1.330 0.18 0.859
Table A1
Probit estimates of propensity score for male’s non-farm employment participation. Location characteristics
DBUNGLUN 1.0952 0.843 1.30 0.194
Variable Coefficient Standard error z-Value Probability
DTARIPKA 0.1858 0.682 0.27 0.785
Household characteristics DFAZIHIN 0.8312 0.696 1.19 0.232
MAGE 0.0937 0.092 1.02 0.307 DLALLIGU 1.7368 0.810 2.14 0.032
MAGE2/100 0.1076 0.085 1.27 0.205 DKANSHEGU 2.4083 0.843 2.86 0.004
MEDUC 0.1217 0.044 2.78 0.005 DCHALLAM 0.2750 0.670 0.41 0.681
PRCLS3YR 0.3276 0.377 0.87 0.385 DTIBALI 1.0949 0.711 1.54 0.124
HHSIZE 0.0417 0.035 1.20 0.230 DKADIA 0.2388 0.699 0.34 0.733
DPRATIO 0.1304 0.270 0.48 0.629 DZION 0.9787 0.753 1.30 0.194
MIGRATN 0.2776 0.130 2.14 0.032 CONSTANT 1.9570 2.595 0.75 0.451
GPMEMB 0.5806 0.334 1.74 0.082
Pseudo-R2 0.3332
CDACCES 0.5200 0.315 1.65 0.094
Log likelihood 52.7050
Observations 300
Household assets
TRACTA 1.2874 0.642 2.01 0.045
IFCATTLE 0.9548 0.388 2.46 0.014
IFGOAT 0.2352 0.395 0.60 0.551
IFGNFWL 0.4329 0.339 1.28 0.202 stocks declining during periods of critical food shortages. The
IFBIKE 0.7021 0.926 0.76 0.448 ATT estimate of 0.212 for food security indicator MSFC suggests
that males’ participation in non-farm employment increases the
Location characteristics probability at which the households would not mortgage their
DTARIPKA 0.7173 0.738 0.97 0.331
standing field crops for current consumption by 21.2%. Thus,
DFAZIHIN 0.2732 0.740 0.37 0.712
DLALLIGU 1.7598 0.839 2.10 0.036 non-farm work appears to be crucial in raising the incomes of farm
DKPENDUA 1.7031 0.876 1.95 0.052 households and improving their food security status.
DKANSHEGU 0.0563 0.664 0.08 0.932 It is also worth mentioning that the estimates of ATT effects of
DCHALLAM 1.3495 0.801 1.68 0.092 participation in non-farm employment on all the outcome vari-
DTIBALI 1.4944 0.830 1.80 0.072
DKADIA 0.4178 0.682 0.61 0.540
ables for males were slightly higher than those of the females, sug-
DZION 0.0533 0.657 0.08 0.935 gesting that male participation tends to increase household
CONSTANT 3.5701 2.539 1.41 0.160 incomes higher than female participation. However, the fact that
2
Pseudo-R 0.3184 female participation results in increased household income and
Log likelihood 62.4525
improved food security status confirms the relevance of female’s
Observations 300
contribution in ensuring stable household food supplies in the
116 V. Owusu et al. / Food Policy 36 (2011) 108–118

Table A3
Sensitivity of matching algorithms on food security outcome variables.

Matching algorithms Males Females

ATT SE Off-support ATT SE Off-support
1. HHINC
Nearest-neighbor (1)a
norep common 3.3630* 1.851 16 0.2285 1.293 168
norep nocommon 3.8009** 1.649 – 0.2285 1.292 168
Kernel matchingb
epan nocommon trim (10) 3.2201* 1.942 14 1.9993* 1.190 34
epan common trim (10) 3.2201* 1.942 14 1.9993* 1.197 34
Radius matchingc
Caliper 0.5 3.4679** 1.627 – 2.6587** 1.237 –
2. MSFC
Nearest-neighbor (1)
norep common 0.1842** 0.092 16 0.1932** 0.099 168
norep nocommon 0.1778** 0.088 – 0.1932** 0.099 168
Kernel matching
epan nocommon trim(10) 0.1877* 0.098 14 0.1881* 0.100 34
epan common trim(10) 0.1877* 0.098 14 0.1881* 0.100 34
Radius matching
Caliper 0.5A 0.2115*** 0.069 – 0.0673** 0.034 190
3. DHC16
Nearest-neighbor (1)
norep common 0.0571 0.124 16 0.2658* 0.161 168
norep nocommon 0.0888 0.106 – 0.2658* 0.161 168
Kernel matching
epan nocommon trim (10) 0.0527 0.207 14 0.2535* 0.131 34
epan common trim (10) 0.0526 0.199 14 0.2535* 0.131 34
Radius matching
Caliper 0.002 0.1717** 0.084 64 0.3333** 0.161 214

Note:
Standard errors (S.E) are based on 200 bootstrap replications.
Off support indicates treated individuals discarded due to missing common support.
a
Nearest-neighbor (1-to-1 matching) algorithms are implemented with and without common support (common and nocommon), and without replacement (norep).
b
Kernel matching algorithms are implemented with kernel functions (epanechnikov), with and without common support (common and nocommon) and with the
additional imposition of a trimming level of 10%.
c
Radius matching with caliper levels (0.5 and 0.002) is implemented.
A
For female non-farm work participation, caliper level of 0.005 is implemented for outcome variable MSFC.
*
Significant at 10% level.
**
Significant 5% level.
***
Significant 1% level.

income diversification process of rural households in sub-Saharan
Africa (Canagarajah et al., 2001; Gladwin et al., 2001).
The magnitudes of the coefficients of the treatment effects indi-
cate that the Average Treatment Effects for the treated (ATT) are
higher than the Average Treatment Effects for the Entire sample
(ATE) and the Average Treatment Effects for the Untreated (ATU).
This finding demonstrates that households that have a higher
probability of participating in non-farm work are able to obtain
higher incomes and improve their food security status over and
above those that are less inclined to participate in non-farm work.
The caliper matching estimates of the ATU effect indicate that if
individuals who did not participate in non-farm work had actually
participated, their household income and food security status
would on average be lower than that of those who participated.
The implication here is that the income and food security gains
from participation in non-farm employment are slightly higher
for households with a higher probability of participating than
households with slightly lower chances of participating in non-
farm employment.
Also presented in Table 3 are the critical levels of gamma (C), at
which the causal inference of significant participation impact may
be questioned. For example, the value of 1.65 for male participa-
tion implies that if households that have the same Z-vector differ
in their odds of participation by a factor of 65%, the significance
of the participation on income may be questionable. The lowest
critical value of C = 1.25 and the highest critical value C = 2.95
clearly indicate that even large amounts of unobserved heteroge-
neity would not alter the inference about the estimated treatment
effects, suggesting that the findings are generally insensitive to
hidden bias.15 The indicators of matching quality presented in Table
4 shows substantial reduction in absolute bias for all the outcome
variables for both males and females. As indicated in the last column
of the Table, the mean bias in the covariates Z after matching lies be-
low the 20% level of bias reduction suggested by Rosenbaum and Ru-
bin (1985). This indicates that the covariates were significantly
balanced as a result of the propensity score matching procedure. In
addition, the pseudo-R2’s after matching are fairly low with none
of the F-statistics being significantly different from zero, suggesting
that the overall results from the matching procedure are satisfactory
in balancing the covariates between the participants and non-partic-
ipants (Sianesi, 2004).
Conclusion
This paper has examined the impacts of non-farm work on farm
household income and food security status, using a sample of farm
households from ten communities in Northern Ghana. A propen-
sity score matching model was employed to account for selection
bias that normally occurs when unobservable factors influence
both participation in non-farm employment and outcomes such
15
DiPrete and Gangl (2004) have indicated that the Rosenbaum bounds are a worst-
case scenario.
 V. Owusu et al. / Food Policy 36 (2011) 108–118
as household income and food security status. The paper addresses
gender heterogeneity by explicitly providing separate estimates for
males and females.
Results of the propensity score matching show that non-farm
work exerts a positive and statistically significant effect on house-
hold income and food security status. These findings are generally
consistent with the widely held view that income from non-farm
work is crucial to food security and poverty alleviation in rural
areas of developing countries. The estimates revealed that not-
withstanding the fact that participation rates of females was higher
than males, participation of males did contribute to higher incomes
and better food security status of households compared to their fe-
male counterparts. As argued by Reardon (1997), women generally
appear to be limited to the low-wage activities in the non-farm
sector, resulting in lower earnings that tend to have lower impacts
on improving food security.
The results from this study indicate that the growing interest of
policy makers in promoting non-farm activities, particularly in rur-
al areas of developing countries is in the right direction. Besides
being a valuable source of income for rural households in develop-
ing countries, non-farm work also helps in smoothing incomes,
which in turn smoothens consumption over long periods of time.
Given that women normally face entry barriers to participation
in non-farm work, which exerts a positive and robust effect on
household income and food security, policy measures could target
them to lower the entry barriers into non-farm activities. In partic-
ular, food safety net policies should generally pay more attention
to the factors that allow increased participation in higher earning
activities by women, since they could then build on existing pat-
tern of addressing food security.
Food security policies go beyond just food production measures,
and also include measures that help in generating adequate levels
of effective demand via income growth or transfers policies. Partic-
ularly in rural areas, enhancing the ability of farm households to
participate in non-farm work is a reasonable strategy to improve
food security in these areas. Promising policy measures that can
help boost non-farm work availability include increasing the ac-
cess of rural households to assets such as financial capital and
non-price factors such as education and infrastructure. However,
it is significant to mention that development of non-farm activities
should actually complement the effort to develop agriculture, since
activities in the former depend directly or indirectly on the latter.
Appendix
See Tables A1–A3.
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