Special Study: The Productivity of Family and Hired Labor in EU Arable Farming

This chapter investigates the impact of labor force composition on agricultural output in EU arable farming. We determine the relative productivity of family and hired labor in five EU member states using FADN data for the years 2001–2008. The results reject the notion that hired labor is generally less productive than family workers. In fact, farms with a higher share of hired workers are more productive than pure family farms in countries traditionally characterized by family labor, namely France and West Germany. Here, an increase in reliance on hired labor or the shift of family labor to more productive tasks could raise productivity. This finding calls into question a main pillar of the received family farm theory. In two of the three countries, we find no statistically different effects of either type of labor. For the United Kingdom, we find the classical case with family farms being more productive than those relying on hired labor.