Jeremy M. D'Antoni

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

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.

Testing dependence using copulas: the case of dual employment

Copulas are functions that parameterize the dependence between univariate marginal distribution functions to form a joint distribution function. Copulas provide a consistent procedure for testing dependence and guiding the choice of empirical model. In this study we use copulas to measure the dependence in labour supply by married farm couples. Using individual data our research provides an easy method that researchers can use to address the issues of dependence. The method outlined here reduces computational time and provides a more efficient method of testing dependence early in the investigative process. Unlike previous studies findings from this study show with robustness that labour supply decision of married farm couples is best modelled jointly.

Effect of health insurance coverage on labor allocation: evidence from US farm households

In the past three decades, farm families have relied on government payments and off-farm income to reduce income risk and increase total household income. Many studies have analyzed the role of government payments; however, little is known about the impact of health insurance coverage on labor allocation. This study builds on previous literature by using copulas to test for dependence in the labor allocation, addressing the importance of fringe benefits to the farm household, and determining how these considerations affect our knowledge of the impact of fringe benefits on off-farm labor. The results indicate that the off-farm hours worked by the operator and spouse are jointly determined; health insurance coverage is an endogenous variable. Using the predicted probability of insurance coverage and joint estimation techniques, we find a positive and highly significant relationship with the hours worked off-farm. Further, we find that both coupled and decoupled payments are negatively correlated with the hours worked off-farm.Keywords: Health insurance coverage, Endogeneity, Copula, Off-farm labor supply, Dependence, Bivariate tobit, Coupled farm programs payments, Decoupled farm program payments.