Agricultural production, human capital, and rural nonfarm activities: Evidence from Nigeria

The four chapters in this dissertation explore the factors that affect the livelihoods of rural households in Nigeria with an emphasis on understanding the role of the nonfarm economy. Although most rural households are involved in the farm sector, the nonfarm sector has grown significantly in recent decades, and its role in rural development has become increasingly important.; The first chapter of this dissertation examines the effect of participation in nonfarm activities on crop expenses of farm households. The relationship is modeled using a non-separable agricultural household model. The model suggests that participating in nonfarm activities can relax the credit constraints facing farm households and reduce risk thereby helping households improve farm production and smooth consumption over time. The results show that participation in nonfarm activities has a positive and significant effect on crop expenses.; The second chapter investigates the impact of nonfarm activities on school enrollment of children ages 6 to 18. Becker and Tomes (1986) model of parental investment in children is used to model the relationship. A discrete time hazard model is used to empirically examine the effect of household nonfarm income and household participation in nonfarm activities on the hazard of their children dropping out of school. The results show that children from households that earn income from nonfarm activities are not only more likely to ever enroll in school, but also complete more years of schooling than those from households that do not earn nonfarm income.; The third chapter examines the effect of education on household activity choices and earnings. A household earnings model and the common Mincer (1974) human capital earnings model were used in the analyses. The results show that schooling influences household activity choices (allocative effect) as well as earnings from the activities (worker effect). More educated households are more likely to participate in nonfarm activities and less likely to participate in farm activities. Schooling also has a bigger effect on nonfarm earnings than farm earnings, given participation.; Finally, the fourth chapter summarizes the findings of this dissertation noting the relevance of results for both the economics literature and rural development policy.