Spillovers from Off-farm Self-Employment Opportunities in Rural Niger

Abstract

Low-skilled off-farm self-employment is the most accessible opportunity for households in rural Niger looking to diversify their income sources. This raises the question of whether promoting the non-farm sector is detrimental to the performance of the farm sector. Unfortunately, the evidence base in West Africa and the Sahel for this important policy question is thin. In this paper we identify the covariates of the farm households’ decision to participate in off-farm self-employment in rural Niger. We estimate the effect of that decision on farm activity investment. We find that participating in off-farm selfemployment is highly correlated with farm and non-farm factors. Participation in off-farm selfemployment is linked to increased agricultural spending on crop and livestock inputs, but a lower propensity to hire labour. Our results suggest that policies to promote the non-farm sector can support the development of the agricultural sector in rural Niger.