employment by sector, as well as average profit<sup>17</sup> earned by participants, for the poor, and the nonpoor are summarized in Table 4. The analysis of table 3 indicates that about half of household enterprises in rural Malawi are in the commerce and tourism sector (wholesale, retail trade, restaurants, and hotels). These are typically small businesses involving people selling or reselling a wide variety of products from groceries and food products to clothes, shoes, etc., and earning on average 6,000 to 7,000 MKW<sup>18</sup> (or 8 to 10USD) monthly. The second most prominent sector is the manufacturing sector (food and non-food combined), which accounts for approximately 40 percent of all household enterprises. The manufacturing sector is dominated by food, beverage, and tobacco manufacturing, which accounts for more than half of the manufacturing sector, represents more than 25 percent of all household enterprises, and includes primarily street vendors of various food and drinks and making a profit in the range of 4,000 to 6,000MKW (or 5.5 to 6USD) monthly.

In general, returns to non-farm self-employment are pretty low (around 6,000MKW ~ 8USD) in rural Malawi, and are lowest in the most popular sectors (Table 4). The commerce and tourism sector, which contains about half of the non-farm businesses, generates on average 6,000 to 7,000KW (8 to 10USD) monthly, as opposed to 9,000 to 12,000 KW (12 to 17USD) of profit reported in the construction and services sector, which represents only 9 to 10 percent of non-farm enterprises. The manufacturing sector, second most important sector generates even lower revenues. Returns from the Food, beverage, and tobacco manufacturing sector are about 3,000MKW monthly, and the non-food manufacturing sector generates about 5,000 to 6,000 KW monthly.

With the sectors of non-farm enterprises defined here, no evidence of dualism becomes particularly apparent from simply observing the distribution of non-farm enterprises by sectors, for the poor versus the non-poor. However, a Kolmogorov-Smirnov test of equality of distribution does indicate a significant difference (at 1%) between poor and non-poor. We do observe a large heterogeneity in returns to participation within each category of non-farm enterprises. And profits earned by the poor are significantly lower compared to the non-poor across all categories of selfemployment. The t-test of mean difference in profit (Table 4) show p-values less than 1% for most categories of self-employment.

# **_Non-farm wage employment in rural Malawi_**

Non-farm wage employment activities are also distributed across several sectors<sup>19</sup> presented in Table 5. The _service sector_ appears to be the largest with about a third of all nonhotel businesses); and (e) Other sectors, which include construction, electricity and utilities, transportation, and other services.

17 This is a direct measure self-reported by the respondent. The reference period for profits is the latest month of operation prior to the interview. Might suffer measurement errors. Therefore, should serve only as rough estimation.

18 Kwachas (MWK), local currency used in Malawi. 1 USD = 723.4319 MWK according to currency.me.uk.

19 We follow the occupation codes used in the Malawi LSMS survey instruments, which includes: Relatively **_skilled_** labor jobs such as: (1) Professional, technical, & related workers; (2) Administration and managerial workers; (3) Clerical and related worker; (4) Sales workers. And 15