The Hourly Labor Supply Response of Agricultural Workers

A number of economic policies are believed to influence an individual's decision of how many hours or weeks to work. Among these policies are welfare programs, income maintenance plans, and unemployment insurance. To date, questions of agricultural labor response to economic incentives have been analyzed by resorting to aggregate data and models, typically utilizing state or U.S. time series data. While this does provide needed information for analysis of some policies, aggregate data and models are deficient in isolating substitution and income effects. These are necessary for analysis of particular programs affecting only income or affecting the individual's budget constraint in a discontinuous way. In particular, aggregate models cannot approach the question of a backward bending supply curve, since aggregate data include not only variations in duration of employment but also variations in labor force participation.