Household Enterprises and Poverty Reduction in Sub-Saharan Africa

Employment in Household Enterprises (HEs) has been an integral part of the recent economic growth in sub-Saharan Africa (SSA). Yet employment and development strategies tend to exclude the sector, despite the fact that households with HEs tend to be richer. A good example is Mozambique, where 34% of households rely on income from this source. Analysis of household livelihoods using panel data shows that starting HEs is associated with upward wealth mobility and poverty reduction, particularly for rural and poorly-educated households. Targeted programmes directed towards the constraints to HE creation, survival and income growth would be likely to enhance the effectiveness of employment and poverty reduction strategies in Mozambique as well as in other low income countries in SSA.