Abstract:
The study examined the effect of non-farm income on household welfare in Uganda using data from three (3) recent waves of the Uganda National Panel Survey (UNPS). A panel – quantitative study was undertaken using secondary data from Uganda Bureau of Statistics (UBOS). The results indicate that; i) having non-farm income has a significant positive effect on household welfare; ii) higher level of education of the household head is associated with higher household welfare. The implications of these findings is that government should focus on the formulation and implementation of policies that inspire households to diversify their income sources in order to improve their wellbeing. Government should also prioritize attainment of higher education levels through increased access to education and retention especially at higher levels. Additionally, government should purpose to remove all constraints to income diversification, through enhancing access to cheap credit and putting in place programmes that enhance entrepreneurial skills of the population, among others All the above put together could increase non-farm income and lead to improved welfare of the households especially those in rural areas.
