This payer analyzes two complementary data sets to study poverty and the no
nfarm sector in rural El Salvador. We find that I ural poverty in El Salvad
or remains acute and significantly higher than in urban areas. While the ru
ral poor are mainly agricultural laborers and marginal farmers, some nonfar
m activities are also of importance to the poor. In fact, nonfarm activitie
s in El Salvador account for a significant share of rural employment and in
come For both the poor and the nonpoor. The poor, on the one hand, are enga
ged in last resort" nonfarm activities that are not associated with high le
vels of labor productivity. The nonpoor, on the other, are engaged in produ
ctive nonfarm activities which are likely to present a potent force for upw
ard mobility. Significant correlates of these high-productivity occupations
include education, infrastructure, location, and gender. While most of the
analysis is at the household level, the data also permit some focus oil sm
all-scale rural enterprise activities. It appears that in El Salvador very
few rural enterprises report utilizing Formal credit in setting up their ac
tivities. In addition, a significant proportion of enterprises are engaged
in subcontracting arrangements with some larger, often urban-based, firm. (
C) 2001 Elsevier Science Ltd. All rights reserved.