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Abstract
In order to stabilise and improve their income situation, rural households are strongly encouraged to
diversify their activities both within and outside the agricultural sector. Often, however, this advice is
only moderately pursued. This paper addresses issues of rural household income diversification in the
case of Poland. It investigates returns from rural household income strategies using propensity score
matching methods and extensive datasets spanning 1998-2008. Results suggest that returns from
combining farm and off-farm activities were lower than returns from concentrating on farming or on
self-employment outside agriculture. This differential is stable over time although returns from
diversification have relatively improved after Poland’s accession to the EU. This is also visible in the
fact that since 2006 returns from combining farm and off-farm activities have evened with returns
from relying solely on hired off-farm labour, thus smoothing the difference observed before the
accession. Further, over the analysed period, households pursuing the diversification strategy
performed better than those relying solely on unearned income. Finally, in general, the income in
households combining farm and off-farm activities was higher than in those combining two off-farm
income sources.