This paper challenges the conclusions of earlier writers regarding the roles of smallholder agriculture, commercial agriculture, and wage labour in rural poverty alleviation in Mozambique. It reviews literature from across Sub-Saharan Africa and use recently collected household level data sets to place Mozambique within this literature. Results show that, as in the rest of SSA, wage labour earnings are concentrated among the best-off rural smallholders; these earnings increase income inequality rather than reducing it. Results also suggest that the same set of households, who are substantially better-off than others, has tended to gain and maintain access to the “high-wage” end of the labour market over time. Key determinants of access to “high-wage” labour are levels of education and previously accumulated household wealth. Income from wage labour plays a key role lifting out of relative poverty those female-headed households that can obtain it, yet only about one in five such households earns wage income.