Agriculture and Human Values

, Volume 31, Issue 2, pp 261–271 | Cite as

It’s not all about the money: understanding farmers’ labor allocation choices

  • Peter HowleyEmail author
  • Emma Dillon
  • Thia Hennessy


Using a nationally representative survey of farm operators in Ireland, this study examines the effect of non-pecuniary benefits from farm work on labor allocation choices. Results suggest that non-pecuniary benefits affect both the decision to enter the off-farm labor market and also once that decision is made, the amount of time spent working off-farm. We find our derived variable representing non-monetary benefits associated with farm work to have a substantial impact similar to the effect of other more widely reported personal and farm structural variables such as the age of the farm operator, farm size, and farming system. The existence of these non-pecuniary benefits serves to increase the implied wage to farmers for their farm work. This in turn can lead to allocations of labor that would seem suboptimal from a purely financial point of view. Rural development policies aimed at creating off-farm opportunities could fail unless returns to off-farm work are high enough to compensate the farmer for losing the benefits associated with the farming lifestyle. From a methodological perspective, our analysis indicates that failure to model off-farm labor allocation choices as a two-part process may lead to some incorrect conclusions regarding the effect of certain explanatory variables. Outside of explaining farmers’ off-farm labor supply it would be useful to incorporate farmer perceptions regarding the non-pecuniary benefits from farming in economic models of farm behavior across a range of activities as this could lead to much more accurate predictions of farmers’ responses to policy changes.


Off-farm employment Farming values Ireland Double-hurdle model 



The authors are grateful to the editor in chief and three reviewers for helpful comments and suggestions that greatly improved this manuscript.


  1. Ackerman, N., D. Jenson, and D. Bailey. 1989. Major sources of satisfaction for farm families. Utah Science 50: 134–142.Google Scholar
  2. Alasia, A., A. Weersink, R.D. Bolman, and J. Cranfield. 2009. Off-farm labor decisions of Canadian farm operators: Urbanization effects and rural labor market linkages. Journal of Rural Studies 25(1): 12–24.CrossRefGoogle Scholar
  3. Basarir, A., and J.M. Gillespie. 2006. Multidimensional goals of beef and dairy producers: An inter-industry comparison. Agricultural Economics 35: 103–114.CrossRefGoogle Scholar
  4. Benjamin, C., and A. Kimhi. 2006. Farm work, off-farm work, and hired farm labor: Estimating a discrete-choice model of French farm couples’ labor decisions. European Review of Agricultural Economics 33(2): 149–171.CrossRefGoogle Scholar
  5. Blamey, R.K., J.W. Bennett, and M. Morrison. 1999. Yea-saying in contingent valuation surveys. Land Economics 75(1): 126–141.CrossRefGoogle Scholar
  6. Colman, D., and D. Harvey. 2004. The future of UK dairy farming. Report commissioned jointly by the MDC, DIAL, and Defra. Accessed 11 July 2013.
  7. Connolly, L., A. Kinsella, G. Quinlan, and B. Moran. 2010. National farm survey. Dublin: Rural Economy Research Centre.Google Scholar
  8. Corsi, A., and J.L. Findeis. 2000. True state dependence and heterogeneity in off-farm labor participation. European Review of Agricultural Economics 27(2): 127–151.CrossRefGoogle Scholar
  9. Cragg, J. 1971. Some statistical models for limited dependent variables with application to the demand for durable goods. Econometrica 39(5): 829–844.CrossRefGoogle Scholar
  10. Cuddeback, G., E. Wilson, J.G. Orme, and T. Combs-Orme. 2004. Detecting and statistically correcting sample selection bias. Journal of Social Service Research 30(3): 19–33.CrossRefGoogle Scholar
  11. Darnhofer, I., W. Schneeberger, and B. Freyer. 2005. Converting or not converting to organic farming in Austria: Farmer types and their rationale. Agriculture and Human Values 22: 39–52.CrossRefGoogle Scholar
  12. Edwards-Jones, G. 2006. Modelling farmers’ decision-making: Concepts, progress, and challenges. Animal Science 82: 783–790.CrossRefGoogle Scholar
  13. El-Osta, H.S., A.K. Mishra, and M.C. Ahearn. 2004. Labor supply by farm operators under “decoupled” farm program payments. Review of Economics of the Household 2(4): 367–385.CrossRefGoogle Scholar
  14. El-Osta, H.S., A.K. Mishra, and M.J. Morehart. 2008. Off-farm labor participation decisions of married farm couples and the role of government payments. Review of Agricultural Economics 30(2): 311–332.CrossRefGoogle Scholar
  15. Gillespie, J., and A. Mishra. 2011. Off-farm employment and reasons for entering farming as determinants of production enterprise selection in US agriculture. Australian Journal of Agricultural and Resource Economics 55: 411–428.CrossRefGoogle Scholar
  16. Hamilton, B.H. 2000. Does entrepreneurship pay? An empirical analysis of the returns of self-employment. The Journal of Political Economy 108(3): 604–631.CrossRefGoogle Scholar
  17. Heckman, J. 1979. Sample selection bias as a specification error. Econometrica 47(1): 153–161.CrossRefGoogle Scholar
  18. Hennessy, T., and T. Rehman. 2008. Assessing the impact of the “decoupling” reform of the Common Agricultural Policy on Irish farmers’ off-farm labor market participation decisions. Journal of Agricultural Economics 59(1): 41–56.CrossRefGoogle Scholar
  19. Hennessy, T., and F. Thorne. 2005. How decoupled are decoupled payments? The evidence from Ireland. Eurochoices 4(1): 30–35.Google Scholar
  20. Herrmann, V., and P. Uttitz. 1990. If only I didn’t enjoy being a farmer! Attitudes and opinions of monoactive and pluriactive farmers. Sociologica Ruralis 30(1): 62–75.CrossRefGoogle Scholar
  21. Howard, W., and M. Swidinsky. 2000. Estimating the of-farm labor supply in Canada. Canadian Journal of Agricultural Economics 48(1): 1–14.CrossRefGoogle Scholar
  22. Howley, P., J. Breen, C.O. Donoghue, and T. Hennessy. 2012. Does the single farm payment affect farmers’ behavior: A macro and micro analysis. International Journal of Agricultural Management 2(1): 57–64.CrossRefGoogle Scholar
  23. Howley, P., and E. Dillon. 2012. Modeling the effect of farming attitudes on farm credit use: A case study from Ireland. Agricultural Finance Review 72: 456–470.CrossRefGoogle Scholar
  24. Huffman, W. 1980. Farm and off-farm work decisions: The role of human capital. The Review of Economics and Statistics 62(1): 14–23.CrossRefGoogle Scholar
  25. Huffman, W.E., and H. El-Osta. 1998. Off-farm work participation, off-farm labor supply, and on-farm labor demand of US farm operators. Paper presented at the 1998 Summer AAEA meeting, Salt Lake City, UT.Google Scholar
  26. Kaiser, H.F. 1974. An index of factorial simplicity. Psychometrika 39: 31–36.CrossRefGoogle Scholar
  27. Kantelhardt, J. 2006. Impact of the Common European Agricultural Policy (CAP) reform on future research on rural areas. Outlook on Agriculture 35(2): 143–148.CrossRefGoogle Scholar
  28. Keeney, M., and A. Matthews. 2000. Multiple job holding—Explaining participation in off-farm employment, labor demand, and labor supply of Irish farm households. Paper presented at the Agricultural Economics Society Conference, Manchester, UK, April 2000.Google Scholar
  29. Key, N. 2005. How much do farmers value their independence? Agricultural Economics 33: 117–126.CrossRefGoogle Scholar
  30. Key, N., and M.J. Roberts. 2009. Non-pecuniary benefits to farming: Implications for supply response to decoupled payments to decoupled payments. American Journal of Agricultural Economics 91(1): 1–18.CrossRefGoogle Scholar
  31. Kimhi, A., and N. Nachlieli. 2001. Inter-generational succession on Israeli family farms. Journal of Agricultural Economics 52(2): 42–58.Google Scholar
  32. Koontz, T.M. 2001. Money talks? But to whom? Financial versus nonmonetary motivations in land use decisions. Society and Natural Resources 14: 510–565.Google Scholar
  33. Kuehne, G., H. Bjornland, and B. Cheers. 2007. There’s more than one type of farmer: Acknowledging farmers’ diversity—An Australian perspective. International Journal of Interdisciplinary Social Sciences 2: 179–186.Google Scholar
  34. Lass, D., J. Findeis, and M. Hallberg. 1989. Off-farm labor employment decisions by Massachusetts farm households. Northern Journal of Agricultural Resource Economics: 149–159.Google Scholar
  35. Lass, D., and C.M. Gempesaw. 1992. The supply of off-farm labor: A random coefficient approach. American Journal of Agricultural Economics 74(2): 400–411.CrossRefGoogle Scholar
  36. Lim-Applegate, H., G. Rodriguez, and R. Olfert. 2002. Determinants of non-farm labor participation rates among farmers in Australia. Australian Journal of Agricultural and Resource Economics 46(1): 85–98.CrossRefGoogle Scholar
  37. Long, J.S., and J. Freese. 2006. Regression models for categorical dependent variables using Stata. College Station, Texas: Stata Press.Google Scholar
  38. Matshe, I., and T. Young. 2004. Off-farm labor allocation decisions in small-scale rural households in Zimbabwe. Agricultural Economics 30(3): 175–186.CrossRefGoogle Scholar
  39. Mishra, A.K., and B.K. Goodwin. 1997. Farm income variability and the supply of off-farm labor. American Journal of Agricultural Economics 79(3): 880–887.CrossRefGoogle Scholar
  40. Nunnally, J.C. 1967. Psychometric theory, 1st ed. New York: McGraw-Hill.Google Scholar
  41. Pannell, D.J., G.R. Marshall, N. Barr, A. Curtis, F. Vanclay, and R. Wilkinson. 2006. Understanding and promoting adoption of conservation practices by rural landholders. Australian Journal of Experimental Agriculture 46: 1407–1424.CrossRefGoogle Scholar
  42. Weersink, A. 1992. Off-farm labor decisions by Ontario swine producers. Canadian Journal of Agricultural Economics 40(2): 235–251.CrossRefGoogle Scholar
  43. Weiss, C.R. 1997. Do they come back again? The symmetry and reversibility of off-farm employment. European Review of Agricultural Economics 24: 65–84.CrossRefGoogle Scholar
  44. Willock, J., I.J. Deary, G. Edwards Jones, G. Gibson, M.J. McGregor, A. Sutherland, J.B. Dent, O. Morgan, and R. Grieve. 1999a. The role of attitudes and objectives in farmer decision making: Business and environmentally oriented behavior in Scotland. Journal of Agricultural Economics 50(2): 286–303.Google Scholar
  45. Willock, J., I.J. Deary, M.J. McGregor, A. Sutherland, J.B. Dent, G. Edwards Jones, R. Grieve, O. Morgan, G. Gibson, and E. Austin. 1999b. Farmers’ attitudes, objectives, behaviors, and personality traits: The Edinburgh study of decision making on farms. Journal of Vocational Behavior 54(1): 5–36.CrossRefGoogle Scholar
  46. Wooldridge, J. 2008. Introductory econometrics: A modern approach. Mason, OH: South Western College Publications.Google Scholar
  47. Vanclay, F. 2004. Social principles for agricultural extension to assist in the promotion of natural resource management. Australian Journal of Experimental Agriculture 44: 213–222.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  1. 1.Environment DepartmentUniversity of YorkHeslington, YorkUK
  2. 2.Rural Economy Development Programme, TeagascAthenry, GalwayIreland

Personalised recommendations