Skip to main content

Demographic composition of farm households and its effect on time allocation

Abstract

The decisions of farmers to work on or off the farm depend in part on household composition and the participation patterns of other family members. This is because of the differential income effects resulting from the household's joint budget constraint and the time and money costs imposed by different household members, and because of the substitutability or complementarity between the farm labor inputs of different household members. This paper demonstrates this point by estimating a joint labor participation model of farm operators and their spouses, in which participation decisions are conditioned on household composition. The model is estimated as a multivariate probit model with fixed effects, by quasi maximum likelihood methods. The results are consistent with the hypotheses that the time costs imposed on the household by small children are larger than the money costs; that the relative importance of time costs is decreasing as children grow up; and that the farm labor inputs of older children are complements to the couple's farm labor inputs but those of prime-age adults are substitutes. JEL classification: J22, J43

This is a preview of subscription content, access via your institution.

References

  • Avery RB, Hansen LP, Hotz VJ (1983) Multiperiod probit models and orthogonality condition condition.International Economic Review 24:21–35

    Google Scholar 

  • Bollman RD (1979)Off-farm work by farmers. Statistics Canada

    Google Scholar 

  • Bourguignon F, Chiappori PA (1992) Collective models of household behavior: an introduction.European Economic Review 36:355–364

    Google Scholar 

  • Chiappori PA (1988) Rational household labor supply.Econometrica 56:63–89

    Google Scholar 

  • Gould BW, Saupe WE (1989) Off-farm labor market entry and exit.American Journal of Agricultural Economics 71:960–969

    Google Scholar 

  • Hallberg MC, Findeis JL, Lass DA (1991)Multiple job-holding among farm families. Iowa State University Press

  • Horney MJ, McElroy MB (1988) The household allocation problem: Empirical results from a bargaining model.Research in Population Economics 6:15–38

    Google Scholar 

  • Hotz VJ, Miller RA (1988) An empirical analysis of life cycle fertility and female labor supply.Econometrica 56:91–118

    Google Scholar 

  • Huffman WE, LangeMD (1989) Off-farm work decisions of husbands and wives: Joint decision making.Review of Economics and Statistics 81:471–480

    Google Scholar 

  • Kahn JR, Whittington LA (1994) The transition to parenthood in Puerto Rico: Occupational status and the timing of first births.Population Research and Policy Review 13:121–140

    Google Scholar 

  • Kimhi A (1993)Institutional environment, ideological commitment, and farmers' time allocation: The case of Israeli Moshavim. Mimeo, Department of Agricultural Economics, Hebrew University, Rehovot, Israel

    Google Scholar 

  • Kimhi A (1994) Quasi maximum likelihood estimation of multivariate probit models: Estimating farm couples' labor participation.American Journal of Agricultural Economics 76: 828–835

    Google Scholar 

  • Kimhi A (1995) Differential human capital investments and the choice of successor in family farms.American Journal of Agricultural Economics 77:719–724

    Google Scholar 

  • Kimhi A (1996) Farmers' time allocation between farm work and off-farm work and the importance of unobserved group effects: Evidence from Israeli cooperatives.Agricultural Economics (in press)

  • Lass DA, Gempesaw CM (1992) The supply of off-farm-labor: A random coefficients approach.American Journal of Agricultural Economics 74:400–411

    Google Scholar 

  • Lopez RE (1986) Structural models of the farm household that allow for interdependent utility and profit maximization decisions. In: Singh J, Squire L, Strauss J (eds)Agricultural Household Models: Extensions, Applications and Policy. The John Hopkins University Press

  • Lundberg S, Pollak RA (1994)Noncooperative bargaining models of marriage. Paper presented at the annual meeting of the American Economic Association, Boston, MA

  • McFadden D (1989) A method of simulated moments for estimation of discrete response models without numerical integration.Econometrica 57:995–1026

    Google Scholar 

  • Sumner DA (1982) The off-farm labor supply of farmers.American Journal of Agricultural Economics 64:499–509

    Google Scholar 

  • White H (1982) Maximum likelihood estimation of misspecified models.Econometrica 50:1–25

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Additional information

An earlier version of this paper was presented at the 1994 meeting of the European Society for Population Economics, Tilburg, The Netherlands. This research relies in part on my Ph.D. dissertation at the University of Chicago. I am grateful to Gary Becker, Joe Hotz, Yair Mundlak, Kevin Murphy, and Yoram Weiss for their useful suggestions and guidance. The research was completed while I was visiting at the University of Maryland. I thank the Department of Agricultural and Resource Economics and the Maryland Agricultural Experiment Station for financial support. Specific constructive comments were also made by Paul Schultz, John Ermisch, and anonymous referees. Finally, I express my gratitude to the staff of the Central Bureau of Statistics in Israel, especially Haim Regev and Meir Rothchild, for providing the data used here. Responsibility for the contents of this paper remains exclusively mine.Responsible editor: John F. Ermisch

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Kimhi, A. Demographic composition of farm households and its effect on time allocation. J Popul Econ 9, 429–439 (1996). https://doi.org/10.1007/BF00573074

Download citation

  • Received:

  • Accepted:

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF00573074

Key words

  • Farm labor
  • allocation of time
  • multivariate probit