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True state dependence and heterogeneity in off-farm labour participation

Author

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  • A Corsi
  • JL Findeis

Abstract

This paper discusses models of off-farm labour participation estimated with panel data. With this kind of model, unexplained persistence in a labour state may be due to true state dependence (when a previous state modifies attitudes, constraints or parameters) and/or to heterogeneity (unobservable permanent individual characteristics). Probit models assuming either heterogeneity or true state dependence are estimated from a two-period panel survey of Pennsylvania farms, and compared with cross-section or pooled sample models. Statistical tests to infer the source of persistence are proposed. The results suggest that for Pennsylvania farmers and spouses, in addition to other personal, household and farm characteristics found to be important in previous studies, previous off-farm labour state is relevant in off-farm labour participation decisions. Copyright 2000, Oxford University Press.

Suggested Citation

  • A Corsi & JL Findeis, 2000. "True state dependence and heterogeneity in off-farm labour participation," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 27(2), pages 127-151, June.
  • Handle: RePEc:oup:erevae:v:27:y:2000:i:2:p:127-151
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    Cited by:

    1. Wang, Xiaobing, 2007. "Labor market behavior of Chinese rural households during transition," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 42, number 92321.
    2. Erik Biørn & Hild-Marte Bjørnsen, 2015. "What motivates farm couples to seek off-farm labour? A logit analysis of job transitions," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 42(2), pages 339-365.
    3. Gundersen, Craig, 2002. "The Well-Being and the Decisions of Farm Households: The Uses of Cross-Country Comparisons," Workshop on the Farm Household-Firm Unit: Its Importance in Agriculture and Implications for Statistics, April 12-13, 2002, Wye Campus,Imperial College 15724, International Agricultural Policy Reform and Adjustment Project (IAPRAP).
    4. Tocco,Barbara & Bailey, Alastair & Davidova, Sophia, 2013. "The Reallocation of Agricultural Labour across Sectors: An Empirical Strategy for Micro Data," Factor Markets Working Papers 157, Centre for European Policy Studies.
    5. Stephan Brosig & Thomas Glauben & Thomas Herzfeld & Scott Rozelle & Xiaobing Wang, 2007. "The dynamics of Chinese rural households' participation in labor markets," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 167-178, September.
    6. 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(02), August.
    7. Kaditi, Eleni A., 2013. "The Impact of CAP Reforms on Farm Labour Structure," Working Papers 157914, Factor Markets, Centre for European Policy Studies.
    8. Deller, Steven & Conroy, Tessa, 2015. "An Exploratory Analysis of Women Farmers and Rural Economic Growth and Development," Staff Paper Series 580, University of Wisconsin, Agricultural and Applied Economics.
    9. 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).
    10. repec:oup:revage:v:30:y:2008:i:2:p:311-332. is not listed on IDEAS
    11. Tocco, Barbara & Davidova, Sophia & Bailey, Alastair, 2014. "Labour adjustments in agriculture: evidence from Romania," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 116(2), August.
    12. Bjornsen, Hild-Marte, 1999. "Off-farm labour decisions of Norwegian farm Households," ERSA conference papers ersa99pa025, European Regional Science Association.
    13. Cornilius Chikwama, 2004. "Rural Off-Farm Employment and Farm Investment: An Analytical Framework and Evidence from Zimbabwe," CERT Discussion Papers 0403, Centre for Economic Reform and Transformation, Heriot Watt University.
    14. Tocco, Barbara & Davidova, Sophia & Bailey, Alastair Creation-Date: 2012-02, "undated". "Key Issues in Agricultural Labour Markets: A Review of Major Studies and Project Reports on Agriculture and Rural Labour Markets," Factor Markets Working Papers 126, Centre for European Policy Studies.
    15. Tocco, Barbara & Davidova, Sophia & Bailey, Alastair Creation-Date: 2012-02, "undated". "Supply and Demand Side Limitations Affecting the Structure of Agriculture and the Rural Economy," Factor Markets Working Papers 124, Centre for European Policy Studies.
    16. 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.
    17. Cornilius Chikawama, 2004. "Quota Rural Off-Farm Employment and Farm Investment: An Analytical Framework and Evidence from Zimbabwe," Working Papers E04, Department of Economics, School of Management and Languages, Heriot Watt University.
    18. BROSIG, Stephan & GLAUBEN, Thomas & Herzfeld, Thomas & WANG, Xiaobing, 2009. "Persistence of full- and part-time farming in Southern China," China Economic Review, Elsevier, vol. 20(2), pages 360-371, June.
    19. Luka Juvančič & Emil Erjavec, 2005. "Intertemporal analysis of employment decisions on agricultural holdings in Slovenia," Agricultural Economics, International Association of Agricultural Economists, vol. 33(2), pages 153-161, September.
    20. Corsi, A. & Salvioni, C., 2013. "Off-farm labour participation of Italian farmers, state dependence and the CAP reform," 2013 Second Congress, June 6-7, 2013, Parma, Italy 149886, Italian Association of Agricultural and Applied Economics (AIEAA).
    21. Kaditi, Eleni, 2013. "The Impact of CAP Reforms on Farm Labour Structure," Factor Markets Working Papers 177, Centre for European Policy Studies.
    22. Findeis, Jill L., 2002. "Subjective Equilibrium Theory of the Farm Household: Theory Revisited and New Directions," Workshop on the Farm Household-Firm Unit: Its Importance in Agriculture and Implications for Statistics, April 12-13, 2002, Wye Campus,Imperial College 15723, International Agricultural Policy Reform and Adjustment Project (IAPRAP).
    23. Lien, Gudbrand D. & Kumbhakar, Subal C. & Hardaker, J. Brian, 2008. "Determinants Of Part-Time Farming And Its Effect On Farm Productivity And Efficiency," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6701, European Association of Agricultural Economists.
    24. Ahituv, Avner & Kimhi, Ayal, 2002. "Off-farm work and capital accumulation decisions of farmers over the life-cycle: the role of heterogeneity and state dependence," Journal of Development Economics, Elsevier, vol. 68(2), pages 329-353, August.
    25. Peter Howley & Emma Dillon & Thia Hennessy, 2014. "It’s not all about the money: understanding farmers’ labor allocation choices," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 31(2), pages 261-271, June.

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