Household heads that are inactively participating in the labor force are more likely to experience poverty than their peers being active in the labor force in 2002. In the early and mid-1990s this was not the case, as there was no statistically difference in the likelihood of falling into poverty for the two groups. Surprisingly, unemployed household heads in rural Mexico have neither a smaller or larger likelihood of being poor than their working peers. Findings in Table 5.1 indicate that this holds for both 1992 and 2002, but not after the crises in 1996 where unemployed heads were more likely to experience poverty than their employed peers. Part of the explanation may be increased remittances (Appendix B).

Employers are the single group that has the lowest probability of being poor followed by self-employed and salaried workers. In 2002, employers in non-agricultural related activities were 14 percentage points less likely to be poor than salaried workers; down from 26 percent points in 1992 and 36 percentage points in 1996. In 1992, the self-employed household heads were 4 percentage points less likely to experience poverty than their salaried worker peers in the off-farm sector. By 2002, this finding had changed so self-employed household heads were not marginally more or less poverty prone than were salaried workers in the non-agricultural sector. In 1992 self-employed in agriculture was not worse of than wageworkers in the nonfarm sector, although they were 4-percentage point more likely to experience poverty than self-employed in the nonfarm sector. During 1992-2002, the selfemployed in agriculture experienced a 22-percentage-points increase in the likelihood of experiencing poverty. In 2002 relative to salaried workers in agriculture, the self-employed were not significantly more likely to experience or escape poverty, controlling for other characteristics, although they were in 1992.

Salaried workers in the agricultural sector experienced an increase of 5-percentage points in the likelihood of being poor during 1992-2002 compared to their peers in the nonfarm sector. Moreover, household heads with spouse engaged in the off-farm sector experienced a lower probability of being poor than did household heads with spouse engaged in agriculture or not working at all. Moreover this finding became stronger throughout the 1992-2002 period and in 2002 household heads with spouse engaged in off-farm activities had a 13-percentage points lower likelihood of experiencing poverty. Also, Araujo (2003) addresses the impact of non-farm rural employment on poverty. Araujo uses municipality data and finds that in Mexican municipalities there is a negative effect of manufacturing and services employment on poverty in semi-urban municipalities and a negative effect of services employment on poverty in rural municipalities.

In the 1990s, heads of household that took a second job were neither more nor less likely to escape poverty than their peers that did not take on an extra job, but in 2002 the second job holders were 6 percentage points more likely to escape poverty than heads that did not take a second job. Hence, the effect of the second job became poverty reducing after 1996 and hence a way that some rural families managed to escape or reduce household poverty.

When comparing the likelihood of being poor for household heads with different labor status in the South region to Mexico as a whole, the findings show that only self-employed southerners in the agricultural sector are statistically significantly more likely to be poor (14 percentage points) than in the rest of the country in 2002. In 1992 there was no difference 27