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Abstract
Agricultural cooperatives differ in many attributes which affect members' farm and off-farm earnings in different ways. As a result, time
allocation patterns between farm work and off-farm work will vary significantly across cooperatives. Participation equations in farm work
and off-farm work of farmers who are members of Israeli moshavim are estimated jointly, including a cooperative-specific factor in each
equation. The fixed effects are found to be significant and important, but can be only partly explained by observed cooperative attributes.
This provides another support to the Monte Carlo results of Borjas and Sueyoshi, that controlling for group effects is superior to alternative
models. The results also imply that unobserved factors have considerable effects on farmers' time allocation, and hence should be controlled
for whenever possible.