IDEAS home Printed from
   My bibliography  Save this article

Risk and farm operator labour supply



This study uses a large increase in US Federal crop insurance subsidies as a natural experiment to identify the importance of risk for farm operator labour supply. Subsidy increases induced greater crop insurance coverage, which in turn reduced farmers' financial risks. Crop insurance participation data are merged with farm-level Census of Agriculture data from 1992 and 1997 to compare how individuals' off-farm labour supply changed in response to the policy-induced change in insurance coverage. The empirical approach controls for unobserved heterogeneity and accounts for the censored nature of the data. It is found that greater insurance coverage reduces the off-farm labour supply of operators who produced at least $100 000 of output, and increased the labour supply of small-farm operators who produced less than $25 000 of output.

Suggested Citation

  • Nigel Key & Michael Roberts & Erik O'Donoghue, 2006. "Risk and farm operator labour supply," Applied Economics, Taylor & Francis Journals, vol. 38(5), pages 573-586.
  • Handle: RePEc:taf:applec:v:38:y:2006:i:5:p:573-586
    DOI: 10.1080/00036840500369043

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Sylvie Démurger & Haiyuan Wan, 2012. "Payments for ecological restoration and internal migration in China: the sloping land conversion program in Ningxia," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-22, December.
    2. Burns, Christopher & Prager, Daniel, "undated". "Do Direct Payments and Crop Insurance Influence Commercial Farm Survival and Decisions to Expand?," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235693, Agricultural and Applied Economics Association.
    3. Jeremy G. Weber & Nigel Key & Erik O’Donoghue, 2016. "Does Federal Crop Insurance Make Environmental Externalities from Agriculture Worse?," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 707-742.
    4. Liang, Yicheng & Li, Shuzhuo & Feldman, Marcus W. & Daily, Gretchen C., 2012. "Does household composition matter? The impact of the Grain for Green Program on rural livelihoods in China," Ecological Economics, Elsevier, vol. 75(C), pages 152-160.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:38:y:2006:i:5:p:573-586. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.