Wage Labor, Agriculture-Based Economies, and Pathways out of Poverty: Taking Stock of the Evidence
The rural poor around the world rely heavily on wage labor activities in order to make ends meet, and to find pathways out of poverty. The recent World Development Report 2013 on Jobs made clear that employment creation and wage labor 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 labor force is employed, and where the overwhelming majority of USAID’s economic development investments are targeted. As USAID and other donors explore approaches and issues that can improve the poverty-reducing impact of its market systems development work, labor markets—and in particular labor that is relevant to the poorest in rural, agriculture-based economies—emerge as a priority. Thus this 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 labor 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 labor. It also proposes some initial implications for programs in order to yield greater employment and poverty reduction impacts.