Essays on off -farm labor market participation, farm production decisions and household economic wellbeing: Empirical evidence from rural Kenya

This study uses household level data collected across different regions of rural Kenya to study household welfare dynamics, engagement in the off-farm labor market and its effects on agricultural intensification for these rural households. The dissertation consists of three separate essays.;The first essay estimates a dynamic panel data model of income to determine the pattern of income growth for these rural households. The paper seeks to determine the relationship between educational attainment and the initial economic position of households on their subsequent income growth and mobility. Results show strong evidence of (low) income persistence for the poor and those in the low agricultural potential areas without at least a secondary school education. As expected, higher education seems to reduce income persistence for the very poor and those in the low potential areas, but also enhances convergence for those in the high potential areas. Overall, the results indicates the potential role of education in not only breaking the cycle of poverty for those trapped in it, but also its ability to allow increased recovery from income shocks. Notably, there is no conclusive evidence of the pattern of income growth or the role of education for non-poor households, implying that such are less susceptible to long-term effects of income shocks in either direction.;The second essay explores the relationship between off-farm work and farm production decisions. In particular, the study examines the effects of a household's involvement in off-farm work on farm-input use and intensification namely, fertilizer and improved seed on maize production. The empirical question of research in this paper relate to whether off-farm earnings contribute to the financing of productivity enhancing investments in agriculture especially in credit constrained situations. The results from the study suggest differences in the impacts of off-farm work on input use and intensification across different inputs and off-farm activity types. While the results suggests possible use of off-farm earnings for input purchase especially for those without other forms of credit, the 'combined' input package seems to represent a substantially greater commitment and one not possibly attractive to those with higher off-farm earnings.;Finally, the third essay seeks to analyze the influence of agricultural and agroecological factors in facilitating access to and earnings from the off-farm labor market for these rural households. The study explores how these farm households respond ex-ante to risky production environments and ex-post to unexpected rainfall shocks. Results indicate that these rural households engage in off-farm work as a long-term strategy to deal with anticipated weather risks to their farming operations. Although the results do not show significant short-term engagements as a result of unexpected rainfall shocks, there is evidence of greater reliance on remittance income and petty agricultural wage labor in response to such unexpected rainfall shocks.