Smallholder Diversification and Income Growth in Zambia

This paper uses nationally representative panel data to analyze the relationship between income diversification and incomes for Zambian smallholder households. We show that shifting to a higher degree of diversification is generally associated with higher incomes. We find that diversification is driven by endowments and access to markets and finance. Education opens up opportunities for well-paid non-agricultural activities, while land shortage forces distress diversification into agricultural wage work.