The pattern of income distribution has been a major concern in the
developing world. This is because high levels of income inequality are likely to
create a hostile atmosphere for economic growth and development. This study
examined rural livelihood strategies and their contribution to the overall income
inequality of households in Akinyele local government area of Oyo state. Primary
data employed in the study were obtained from 105 respondents selected through a
multi-stage sampling technique. Data were analyzed using descriptive statistics,
multinomial logit and the generalized entropy inequality indices as a measure of
inequality. The distribution of respondents by type of livelihood strategy adopted
revealed that almost half of the respondents adopted the combination of farm and
non-farm strategy while 14.3% and 40.0% adopted only farm and non-farm
strategy respectively. Income inequality was the highest among non-farming
households and the lowest among farming households, implying that income from
non-farm activities contributed most to income inequality in the study area. The
study revealed that the major factor which negatively influenced the choice of
farming as a livelihood strategy was household size while factors such as age and
land ownership had positive and negative effects on the adoption of the non-farm
strategy respectively. The study recommends that policies targeted at rural dwellers
should centre on improved access to productive assets such as land for the landless
farmers as well as the provision of improved technology, which could encourage
the ageing farming population to engage in farming activities.