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Work, Welfare, and the Informal Economy: Toward an Understanding of Household Livelihood Strategies

Drawing on data from a survey of family households in nonmetropolitan Pennsylvania, this paper examines how households construct livelihood strategies through partieipalion in the formal labor market, government assistance programs, and informal work (for cash, barter, and savings/self provisioning). Throughout, special attention is paid to influence of household income. The results show that participation in a varied livelihood strategy is common. Greater formal labor force participation is shown among higher-income households, and greater participation in assistance programs is shown among lower-income households. Engagement in the informal economy, however, is shown to differ little by household income. Multivariate models are used to explore key correlates of participation in various livelihood strategies. Implications for future research and efforts aimed at poverty alleviation and community development are then discussed.