An agricultural household model provides the framework for modeling off-farm work participation and off-farm and on-farm work decisions of farm operators. The empirical results are obtained from fitting the econometric model to data from a large national survey. In the estimated structural off-farm work participation equation, the operator's off-farm wage offer has a strong positive effect and other household income has a negative effect on the probability of off-farm work. For farm operators who participate in off-farm work, the wage elasticity of their off-farm labor supply is positive but of their on-farm labor demand is zero. The income elasticity of off-farm work for those who participate in off-farm work and of on farm work for those who specialize in farm work is negative. Implications are developed for the farm problem.
This report is published in Research in Agricultural & Applied Economics
Huffman, Wallace E. and El-Osta, Hisham, "Off-Farm Work Participation, Off-Farm Labor Supply and On-Farm Labor Demand of U.S. Farm Operators" (1997). Economic Staff Paper Series. 276.