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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.