This paper reviews the relative importance of different components of rural labor markets, examining how their functions differ across geographical locations and change over time, and inquiring into the difference in the contribution to poverty reduction among different jobs (i.e., agricultural wage employment, formal and informal nonfarm wage jobs, and nonfarm self-employment). Improving rural investment climate through investment in infrastructure and provision of credit will be helpful, because in all likelihood, increased access to nonfarm jobs, in general, and formal jobs in particular, will become a key factor affecting the improvement of living standards and poverty reduction in Sub-Saharan Africa (SSA), a phenomenon particularly visible in Asia from the mid-1980s to late-2000s which has started to appear in Africa. The development of agriculture stimulates the growth of nonfarm sectors through production and consumption linkages. Furthermore, increased farm income tends to be invested in schooling of children, who later look for nonfarm jobs, as seen in the Asian experience. Supply of such educated labor force to nonfarm sectors must have contributed to their development, and balanced development strategy for both farm and nonfarm sectors is clearly needed in SSA for achieving the twin goals of improving living standards and reducing rural poverty.
Estudillo, J.P.; Matsumoto, T.; Zia Uddin, H.C.; Kumanayake, N.S.; Otsuka, K. Labor Markets, Occupational Choice and Rural Poverty in Selected Countries in Asia and Sub-Saharan Africa. World Bank, Washington DC, USA (2012) ii + 32 pp.