Nonfarm Employment and Poverty Reduction in Rural Ghana: A Propensity-Score Matching Analysis

This article investigates the impact of nonfarm employment on farm household income and way out of poverty, using farm household data from Brong-Ahafo region of Ghana. A propensity score matching model is used to evaluate the impact participating in both wage and self-employment. Separate estimates are also provided for males and females. The results from the study show that nonfarm employment has a positive and robust effect on farm household income and a negative and significant effect on the likelihood of being poor. Self-employment was found to have much higher impacts than wage employment, reflecting the fact that most employment opportunities in the rural areas are in the former sector