The focus in this paper is on the driving forces of off-farm income-generating activities and the extent to which such forces are accessible to poor households in rural Tanzania. The paper makes use of the utility maximization theory in which a farmer’s decision to offer labour to off-farm employment depends on the utility derived from such employment. The results shows that the decision to pursue off-farm employment is the result of push factors related to the lower incomes from the farm sector. Poor households have relatively higher incentives to offer labour to off-farm employment to complement low farm incomes. However, barriers to entry remain an obstacle to off-farm employments because such employment requires capital up front.
