HOW DO THE VERY POOR MAKE A LIVING?

HOW DO THE VERY POOR MAKE A LIVING? The Banerjee and Duflo article generalizes about how the very poor make their livings. A large percentage of them are entrepreneurs–that is, self-employed. Many have multiple occupations. Agriculture is of less importance than I would have thought. In Udaipur, only 19% if households list agriculture as their main source of income. Being a daily laborer is the main source of income, and that daily labor usually involves temporary migration, usually for a month or so at a time. The very poor do not have specialized skills (an absence related to multiple occupations and temporary employment). They have few opportunities to save and get any kind of return on their savings. I argued earlier that a reason (other than the return on the related business investment) that microfinance is helpful for development is that knowing how to use markets is a valuable skill. Banerjee and Duflo add another reason: borrowing provides “a disciplined way to save—by paying down the loan.”