FARM HOUSEHOLD LABOR ALLOCATION AND HIRED LABOR DEMANDS IN THE MIDWEST U.S.: THE IMPACT OF GOVERNMENT PAYMENTS

In addition to farm work, most farm households in developed countries have at least one person working off-farm. The purpose of this paper is to examine if, and how, government payments, personal characteristics and household characteristics affect labor allocation of farm operators and their spouses, and the decisions to hire labor. We estimate an 8-regime multinomial logit model and a three equation multivariate probit model to quantify these impacts. Results indicate that age of household members is consistent with the life-cycle hypothesis on increasing then decreasing labor market par, and is positively associated with demand for hired labor. Hired farm labor and off farm activities increase with the operator education levels. As household size increases, a household member is more likely to work off the farm. Increasing net worth is found to have a positive impact on probability of spouses working on the farm as well as hired labor being used. Both coupled and decoupled payments increase demand for hired labor which is consistent both with farm expansion and reduced family labor time on the farm.


Issue Date:
2007
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/6711
Total Pages:
22
JEL Codes:
J22; Q12; Q18
Series Statement:
Working Paper
07-11




 Record created 2017-04-01, last modified 2017-08-23

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