3) a livelihood lens, showing what income from HEs means to the livelihood portfolio of a household trying to maximize welfare and escape or avoid poverty.

The paper argues that based on these pragmatic, results-based approaches, the role of this sector in economic growth and livelihoods can be identified, and context-specific development strategies that will support these businesses and households can be designed, which will enable markets to work for the benefit of low-income households trying to climb out of poverty or stay out of poverty.<sup>3</sup> The paper is organized as follows. After a brief discussion of data and definitions, section three presents employment and livelihood trends in selected SSA countries that have experienced a recent period of broad-based economic growth, using national household survey datasets. It‟s shown that even in countries with double digit growth in the non-agricultural, nonmineral extraction sectors, HEs have been responsible for the majority of the non-agricultural employment growth, and this trend is likely to continue for several decades owing to high projected labor force growth, low education levels, and the difficulties of growing employment fast enough in large, modern firms. Section four is an analysis of HE owners themselves: their distinguishing characteristics, the determinants of earnings in this sector, and what HE owners perceive as their constraints. Finally, section five analyzes HEs as a household livelihood strategy, arguing that fragmented evidence suggests that in low income SSA countries, HEs have played an important role in household income generation for households near the poverty line. We conclude that HEs need to be a key element in effective poverty reduction strategies in lowincome SSA countries.

# **2. Data and definitions**

This paper primarily analyzes Household Enterprises and occasionally Micro Enterprises. Both Household Enterprises and Micro Enterprises are _informal non-farm enterprises_ that are unincorporated and owned by households. Specifically, Household and Micro enterprises are defined as follows:

- _Household Enterprises_ (HEs) are own-account (self-employed) enterprises working in non-agricultural sectors that may employ contributing family workers.

- _Micro Enterprises_ (MEs) are own-account (self-employed) enterprises working in non-agricultural sectors that employ at least one non-family worker on a continuous basis.

- he whole group of unincorporated enterprises identified in household surveys we refer to as _Non-farm Enterprises_ (NFEs). We use this term because in some employment data we are unable to distinguish between HEs and MEs, so we count all those who report their employment status as “self-employed/own account” as NFE.

- When analyzing employment, all participating family workers in HEs or MEs are assigned to the NFE sector as well. Employees in MEs outside the family are not included and likely show up as wage workers.

> 3 Our approach does not deny that many, if not most, people who own or work in HEs in SSA have a precarious livelihood.  In the terminology of the ILO, this activity is usually “vulnerable employment” (ILO, 2011). What our approach considers is whether this activity is a viable employment strategy which enhances the income and welfare of the household, and if so, for whom?

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