The determinants of nonfarm income diversification in rural Peru

Ð This paper shows that in Peruvian rural areas, there has been substantial growth over the past decade in household employment outside of own-farming. At present 51% of the net income of rural households comes from these o€-farm activities, and thus they certainly cannot be considered as``as``marginal.'' The reasons households diversify their incomes are several. Access to public assets such as roads and private assets such as education and credit is an important factor in diversi®cation. Increasing access to these assets will help rural households to increase their self-employment as well as wage employment in the nonfarm sector. Ó