This paper used a primary data collected through a surveys among farmers in rural Kedah to examine the effect of non farm income on poverty and income inequality. This paper employed two method, for the first objective which is to examine the impact of non farm income to poverty, we used poverty decomposition techniques-Foster, Greer and Thorbecke (FGT) as has been done by Adams (2004). For the second objective, which is to examine the impact of non farm income to income inequality, we used Gini decomposition techniques. Our result indicate that non farm income can improve the level of poverty or non farm income sources contributed towards poverty reduction among agricultural household. All of the poverty measures show that the inclusion of non-farm income into the agricultural household income reduce the level, depth and severity of poverty. But on the other hand, non farm income increased income inequality among agricultural household in Kedah. As expected agricultural income is the main source of income for rural people in the study area. The policy implication of this study is to encourage non-farm income activities among agricultural households as this would raise their income and hence, reduce poverty among them. However, it should be focused on value-added activities, especially on the lower income group.
Colleting the data through a survey in the Northern region of Malaysia; Kedah, Perlis, Penang and Perak, this study investigates intergenerational social mobility in Malaysia. We measure and analysed the factors that influence social-economic mobility in Malaysia. In estimating the factors that influence social-economic mobility, we employ a binary choice model based on the maximum likelihood method. The social mobility variable is measured using the difference between the educational achievement between a father and his son. If there is a change of at least of two educational levels between a father and his son, then this study will assign the value one (1) which means that social mobility has occurred. We found that besides father's education, father's attitude and the establishment of a university in the area have also contributed to social mobility of the rural communities.
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