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Effect of Farm Income and Off-Farm Wage Variability on Off-Farm Labor Supply

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  • Mishra, Ashok K.
  • Holthausen, Duncan M.

Abstract

This study models the effects of variability in farm income and off-farm wages on farm operators' labor allocation decisions. A simple theoretical model is employed to develop hypotheses, which are then tested empirically. Variability in farm income and off-farm wages is predicted to have a positive and negative effect, respectively, on off-farm hours worked. The empirical results confirm these predictions.

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  • Mishra, Ashok K. & Holthausen, Duncan M., 2002. "Effect of Farm Income and Off-Farm Wage Variability on Off-Farm Labor Supply," Agricultural and Resource Economics Review, Cambridge University Press, vol. 31(2), pages 187-199, October.
    • Handle: RePEc:cup:agrerw:v:31:y:2002:i:02:p:187-199_00
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    1. El-Osta, Hisham S. & Bernat, G. Andrew & Ahearn, Mary C., 1995. "Regional Differences in the Contribution of Off-Farm Work to Income Inequality," Agricultural and Resource Economics Review, Cambridge University Press, vol. 24(1), pages 1-14, April.
    2. Sommer, Judith E. & Banker, David E. & Green, Robert C. & Kalbacher, Judith Z. & Peterson, Neal R. & Sun, Theresa Y., 1997. "Structural and Financial Characteristics of U.S. Farms, 1994: 19th Annual Family Farm Report to the Congress," Agricultural Information Bulletins 309838, United States Department of Agriculture, Economic Research Service.
    3. El-Osta, Hisham S. & Bernat, G. Andrew, Jr. & Ahearn, Mary Clare, 1995. "Regional Differences In The Contribution Of Off-Farm Work To Income Inequality," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(1), pages 1-14, April.
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    1. Lagerkvist, Carl Johan & Gregory, Mark & Olson, Kent D., 2003. "Enhancing The Competitiveness And Risk-Efficiency Of Farm Assets Through Holding Farm/Financial Asset And Off-Farm Income Portfolios," 2003 Annual meeting, July 27-30, Montreal, Canada 22125, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Dewbre, Joe & Mishra, Ashok K., 2002. "Farm Household Incomes And U.S. Government Program Payment," 2002 Annual meeting, July 28-31, Long Beach, CA 19780, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Tomas Hlavsa & Jindrich Spicka & Marie Stolbova & Zuzana Hlouskova, 2020. "Statistical analysis of economic viability of farms operating in Czech areas facing natural constraints," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(5), pages 193-202.
    4. Collins-Sowah, Peron A. & Henning, Christian H. C. A., 2019. "Risk management and its implications on household incomes," Working Papers of Agricultural Policy WP2019-05, University of Kiel, Department of Agricultural Economics, Chair of Agricultural Policy.
    5. Hanson, Kenneth & Somwaru, Agapi, 2003. "Distributional Effects of U.S. Farm Commodity Programs: Accounting for Farm and Non-Farm Households," Conference papers 331120, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Thrush, Alan J., 2003. "History, Organization And Strategies For Grain Producers And The Grain Industry In Michigan," Graduate Research Master's Degree Plan B Papers 11070, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    7. Xuan Chen & Jing Chen & Chien-Yu Huang, 2019. "Too Risky to Focus on Agriculture? An Empirical Study of China’s Agricultural Households’ Off-Farm Employment Decisions," Sustainability, MDPI, vol. 11(3), pages 1-18, January.
    8. McNamara, Kevin T. & Weiss, Christoph R., 2005. "Farm Household Income and On-and-Off Farm Diversification," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(1), pages 1-12, April.
    9. Chang, Hung-Hao & Mishra, Ashok, 2008. "Impact of off-farm labor supply on food expenditures of the farm household," Food Policy, Elsevier, vol. 33(6), pages 657-664, December.
    10. Blank, Steven C., 2005. "Hedging with off-farm income: implications for production and investment decisions across farm sizes," 2005 Annual Meeting, July 6-8, 2005, San Francisco, California 291741, Western Agricultural Economics Association.
    11. Robbins Michael W., 2014. "The Utility of Nonparametric Transformations for Imputation of Survey Data," Journal of Official Statistics, Sciendo, vol. 30(4), pages 1-26, December.
    12. Jindrich Spicka & Tomas Hlavsa & Katerina Soukupova & Marie Stolbova, 2019. "Approaches to estimation the farm-level economic viability and sustainability in agriculture: A literature review," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(6), pages 289-297.
    13. Chen, Xuan & Vuong, Nguyen, 2018. "Climate and Off-farm Labor Supply of Agricultural Households: Evidence from Rural Vietnam," 2018 Annual Meeting, August 5-7, Washington, D.C. 274187, Agricultural and Applied Economics Association.
    14. Agwu, Nnanna Mba & Nwankwo, Emmanuel Eze & Anyanwu, Cynthia Ijeoma, 2014. "Determinants Of Agricultural Labour Participation Among Youths In Abia State, Nigeria," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 2(1), pages 1-8, January.
    15. Vergara, Oscar & Coble, Keith H. & Patrick, George F. & Knight, Thomas O. & Baquet, Alan E., 2004. "Farm Income Variability and the Supply of Off-Farm Labor by Limited-Resource Farmers," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(2), pages 1-13, August.
    16. Lagerkvist, Carl Johan & Larsen, Karin & Olson, Kent D., 2006. "Off-farm income and farm capital accumulation: a farm-level data analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21480, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Severini, Simone & Tantari, Antonella & Di Tommaso, Giuliano, 2016. "The instability of farm income. Empirical evidences on aggregation bias and heterogeneity among farm groups," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(1), pages 1-19, April.
    18. Pandit, Mahesh & Paudel, Krishna P. & Mishra, Ashok K., 2013. "Do Agricultural Subsidies Affect the Labor Allocation Decision? Comparing Parametric and Semiparametric Methods," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(1), pages 1-18, April.
    19. Chen, Xuan & Chen, Jing & Huang, Chien-Yu, 2016. "Assessing Off-farm Employment Decisions of Rural Households in China," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236262, Agricultural and Applied Economics Association.
    20. Brown, Jason P. & Goetz, Stephan J. & Fleming, David A., 2012. "Multifunctional Agriculture and Farm Viability in the United States," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 126929, Agricultural and Applied Economics Association.
    21. D'Antoni, Jeremy M. & Khanal, Aditya R. & Mishra, Ashok K., 2014. "Examining Labor Substitution: Does Family Matter for U.S. Cash Grain Farmers?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(2), pages 1-12, May.
    22. Mishra, Ashok K. & Paudel, Krishna P., 2008. "Policy Reform and Off-farm Labor Supply by Operators in the Delta Region: A," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6725, Southern Agricultural Economics Association.
    23. Hartarska, Valentina M. & Mai, Chi, 2008. "Financing Constraints and the Family Farm: How do Families React?," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6861, Southern Agricultural Economics Association.
    24. Corsi, Alessandro & Salvioni, Cristina, 2017. "Once part-timer always part-timer? Causes for persistence in off farm work state of farmers," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 6(2), September.
    25. Luigi Biagini & Simone Severini, 2021. "The role of Common Agricultural Policy (CAP) in enhancing and stabilising farm income: an analysis of income transfer efficiency and the Income Stabilisation Tool," Papers 2104.14188, arXiv.org.

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