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.

Bosch, Darrell J.
Marchant, Mary A.
McKenzie, Andrew M.
Paudel, Krishna P.
Issue Date:
May 01 2014
Publication Type:
Journal Article
PURL Identifier:
Published in:
Journal of Agricultural and Applied Economics, Volume 46, Number 2
Page range:
Total Pages:
JEL Codes:
D13; J22; J23; Q12; Q18; R38

 Record created 2017-04-01, last modified 2018-01-22

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