Impact of Non-Farm Enterprises on Household Poverty Status: A Propensity Score Matching Approach

The study evaluates the impact of Non-Farm Enterprises (NFEs) on household poverty status in Uganda, using 2016/17 and 2019/20 National Household Surveys’ data. Using Propensity Score Matching and Quasi-binomial Generalized Linear Model, the results indicate that participation in NFEs significantly reduces poverty incidence, with participating households being 8% and 6% likely to be non-poor in 2016/17 and 2019/20, respectively. Additionally, NFE income enhanced expenditures and upward-income mobility, with rural and low-income households benefiting more. However, regional disparities persist, particularly in disadvantaged districts. Findings highlight the critical role of NFEs in diversifying income sources and improving well-being and thus strategic to poverty reduction.