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Examining Labor Substitution: Does Family Matter for U.S. Cash Grain Farmers?

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  • D'Antoni, Jeremy M.
  • Khanal, Aditya R.
  • Mishra, Ashok K.

Abstract

The substitution of capital for labor and new labor-saving technologies has reduced the labor required for farming, yet many farms today depend on hired labor in some form. Common in the literature is the assumption of perfectly substitutable farm labor. This has implications for the operator’s off-farm labor decision. Intuitively, different forms of farm labor have different impacts on production. We use the Agricultural and Resource Management Survey to estimate the elasticity of substitution between hired and family labor. The results provide little evidence to support the popular homogeneity assumption and find labor can be unitary and complimentary under certain scenarios.

Suggested Citation

  • 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.
    • Handle: RePEc:ags:joaaec:169062
    DOI: 10.22004/ag.econ.169062
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    1. Michael W. Robbins & Sujit K. Ghosh & Joshua D. Habiger, 2013. "Imputation in High-Dimensional Economic Data as Applied to the Agricultural Resource Management Survey," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 108(501), pages 81-95, March.
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    3. 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.
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    5. Barry K. Goodwin & Ashok K. Mishra, 2006. "Are “Decoupled” Farm Program Payments Really Decoupled? An Empirical Evaluation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 73-89.
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    Cited by:

    1. Nguyen, Huy, 2014. "Crop diversification, economic performance and household’s behaviours Evidence from Vietnam," MPRA Paper 59090, University Library of Munich, Germany.
    2. Wang, Xiaobing & Huang, Jikun & Rozelle, Scott, 2017. "Off-farm employment and agricultural specialization in China," China Economic Review, Elsevier, vol. 42(C), pages 155-165.
    3. Wang, Xiaobing & Yamauchi, Futoshi & Huang, Jikun & Rozelle, Scott, 2020. "What constrains mechanization in Chinese agriculture? Role of farm size and fragmentation," China Economic Review, Elsevier, vol. 62(C).
    4. Shahzad, Muhammad Abid & Fischer, Christian, 2021. "The State of Other Gainful Activities in European Union-27: An Empirical Analysis of Trends and Determinant Factors," 2021 Conference, August 17-31, 2021, Virtual 315226, International Association of Agricultural Economists.

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    More about this item

    Keywords

    Agribusiness; Agricultural and Food Policy; Consumer/Household Economics; Labor and Human Capital; Productivity Analysis;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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