Wage labor, agriculture-based economies, and pathways out of poverty

Evidence review on wage labour and poverty reduction in agricultural economies.

The rural poor around the world rely heavily on wage labour activities in order to make ends meet, and to find pathways out of poverty. The World Development Report 2013 on jobs made clear that employment creation and wage labour constitute both fundamental opportunities and challenges in the context of substantial economic growth and the acceleration of structural transformation, particularly in sub-Saharan Africa. This has profound implications, especially for agriculture, the sector in which about two thirds of the African labour force is employed, and where the overwhelming majority of USAID's economic development investments is targeted.

As USAID and other donors explore approaches and issues that can improve the poverty-reducing impact of its market systems development work, labour markets — and in particular labour that is relevant to the poorest in rural, agriculture-based economies— emerge as a priority. Thus the Leveraging Economic Opportunities (LEO) initiative on 'Highlighting Labor in Agricultural Market Systems' aims to raise awareness and to develop practical resources to support better integration of labour into the practice of market systems development. As its first output, this report provides a stock-take on the current literature on employment and pathways out of poverty, with a special focus on rural wage labour. It also proposes some initial implications for programmes in order to yield greater employment and poverty reduction impacts.