Household's Incomes and Poverty Dynamics in Rural Kenya: A Panel Data Analysis

This study attempts to analyse rural households’ income and poverty incidence over time. The analysis uses balanced panel data of 1,299 households in rural Kenya. The results reveal considerable regional welfare disparities and dynamics over time in rural Kenya. The geographical locations where the households are situated matter. The welfare dynamics are associated with demographic factors such as households’ dependency burdens, gender and the education attainment of the household heads. Households with high dependency ratios and those under single-female headship are more likely to transition into poverty. The finding underscores the increasing importance of post-secondary education in the welfare of rural households. The success of any education policy in reducing poverty hinges on participants excelling beyond secondary schools and acquiring skills that are in demand on the job market. The results also highlight the increasing importance of the land resource in the rural areas. However, with shrinking land sizes due to increased population pressure, access to more land is not an option. The panacea is sustainable agricultural intensification and diversification to off-farm incomes. Perhaps the most disturbing finding is the effect of rainfall shocks on household welfare. While the amount of rainfall somehow increases household income, rainfall variability significantly reduces incomes, therefore, predisposing households to poverty. This is perhaps an indicator of the harmful effects of global warming and increased weather variability on agricultural-based households in sub-Saharan Africa. Finally, the study shows the importance of improved access to infrastructure and markets on rural household welfare. Consequently, the capability of the devolved development programmes to pull the consistently poor out of poverty is put on spotlight.