Income Growth and Mobility of Rural Households in Kenya: Role of Education and Historical Patterns in Poverty Reduction

Summary and Conclusions

The results from the study suggest differences in the role of historical patterns on rural
income growth and mobility and the potential of education in breaking the cycle of
income persistence across different agricultural potential areas and poverty status.
Overall though, rural households in Kenya show weak evidence (at 10% level) of income
persistence especially at lower levels of education. At higher levels of education, there is
evidence of convergence of incomes towards the mean though this remains insignificant
even at mean levels of education of up to a primary education (6.36 years). As discussed
earlier, this result somehow deviates from earlier findings from Africa possibly due to the
differences in the econometric procedures employed. Disaggregation of these results by
poverty status and agricultural potential does however provide some answers.

Households below the poverty line and without a secondary education show
strong evidence of income persistence which is clearly broken for households whose head
had at least a secondary education. There is no clear pattern of income growth for non-
poor households with or without secondary education. The existence of income
persistence for the very poor and uneducated is consistent with the theory of cumulative
advantage and possible existence of poverty traps. This does imply the need for targeting
those who are economically disadvantaged so as to set them up on a positive growth
process.

A similar pattern emerges for households in the low potential areas where
evidence of income persistence is observed. As expected, a much higher education in
form of college training is required to break this cycle of low income persistence given
high entry barriers into viable income earning activities in the off-farm sector as a

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