Income Diversification and Poverty Reduction in Rural Economies

Abstract

This study explores how income diversification strategies affect poverty reduction in rural economies of Sub-Saharan Africa and South Asia. Using household-level data from 4,000 rural families and econometric modeling, the research finds that combining agriculture with non-farm income sources—such as small-scale manufacturing, services, or seasonal work—significantly reduces poverty and increases financial resilience. The study emphasizes the importance of access to credit, vocational training, and market linkages to enable successful diversification. The findings inform policymakers and development agencies designing programs to promote sustainable rural livelihoods.