typically informal activities may provide a last resort to food security, helping to reduce the severity of deprivation and avoid more irreversible processes of destitution.<sup>9</sup> High and low return activities within farm and nonfarm sectors may feed into each other. For those with few assets, seasonal, and insufficient income from subsistence agriculture, and lack of access to liquidity or credit, poorly remunerated off-farm activities may be the only available option. Households that are able to overcome financial or asset constraints may diversify or specialize in agricultural and non-agricultural activities, depending not only on access to specific assets but also on household demographic characteristics and the functioning of local labor and credit markets. The observed dualism also often appears to be drawn along gender lines, with women more likely to participate in the least remunerated agricultural and non-agricultural activities. Given the existence of both low and high return rural income-generating activities, with varying barriers to access, previous empirical studies have shown a wide variety of results in terms of the relationship of rural income-generating activities, and in particular RNF activities, to poverty (FAO, 1998; Lanjouw, 1999; Elbers and Lanjouw, 2001; Adams, 2001 and 2002; Isgut, 2004; de Janvry, Sadoulet, and Zhu, 2005; Lanjouw and Shariff, 2002).

The country case study literature suggests that household participating in higher-return RNF activities are wealthier and have more upward income mobility (Barrett et al. 2001; Bezu et al, 2012; Bezu and Barrett, 2012, among others), a relationship that holds up in cross country studies and across increasing levels of development (Davis, et al, 2010; Winters, et al, 2010). Recent literature focuses on the dynamics of household participation in RNF activities. Bezu and Barrett (2012) find that households able to accumulate capital, increase adult labor or increase access to credit and savings were more able to access high-return RNF activities. Chawanote and Barrett (2013) find the existence of an “occupational ladder” in rural Thailand in which transitions into the RNF economy lead to increased income and transitions into farming with reduced income.

To explore the relationship across countries between rural income-generating activities and wealth, for each country we examine activities by expenditure quintile. Figure 12a charts income shares by expenditure quintile for all countries in the African sample. Focusing on on-farm activities, the darkest color, we see a sharp decrease in the share of on-farm income with increasing levels of wealth, dropping from around 50 percent of income in the poorest quintile in most countries, to less than 20 percent in the wealthiest quintile. The drop in on farm sources of income is made up by the increasing importance of off farm (non-agricultural wage and self-employment) sources of income for wealthier rural households. The clear trend evident from the countries in the African sample is not as clear in the non-African countries in Figure 12b. Here Bangladesh, Bulgaria, Nepal, Pakistan and Tajikistan show the opposite trend; the share of on farm activities increases with wealth.

> 9 See Lanjouw and Lanjouw (2001) and Lanjouw and Feder (2001) for a general discussion relevant to non-farm activities and Fafchamps and Shilpi (2003) for Nepal and Azzarri, Carletto, Davis, Fatchi, and Vigneri (2006) for Malawi, for example, regarding the role of agricultural wage labor.

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