Incomes, Inequality, and Poverty in Kenya

During the twentieth century there were dramatic changes in the structure of Kenya’s economy and in the sectorial allocation of labour. Kenya started out with almost the whole of its labour force in agriculture and related activities, but a century later more than half of the labour force is in formal or informal non-agricultural activities. The share of agriculture in gross domestic product has fallen from above three-quarters to about a quarter. This structural transformation has driven the changes in incomes, income distribution, and poverty. This chapter seeks to measure and explain changes in incomes, inequality, and poverty in Kenya. It starts from a very long-term perspective covering the twentieth century, then focuses on a more detailed analysis of the recent period for which data are available.