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Abstract
This paper tests whether structural change in US agriculture is an important channel to TFP growth and evaluates the
relative impact of (i) public research and education policies, (ii) private R&D and market forces, and (iii) government farm
programs on structural change. We specify a structural econometric model, fit it to US state aggregate data, 1953-1982, and
use the associated reduced-form model to perform counter-factual policy simulations. The findings include: structural change
is a channel to TFP growth in both crop and livestock subsector, i.e. specialization, size, and part-time farming do impact TFP,
holding other variables constant. Public R&D and education have been at least as important as private R&D and market forces
for changing livestock specialization, farm size, and farmers' off-farm work participation over the study period, but private
R&D and market forces have been relatively more important for crop specialization. Changes in farm commodity programs
had little impact on farm structure over these study period. Overall, we conclude that if public R&D and education policies
had been unchanged at their 1950 values over 1950-1982, major structural changes in US agriculture would have occurred
anyway. The forces of private R&D and market forces were at work, including a decline in the price of machinery services
and agricultural chemicals, relative to the farm wage. © 2001 Elsevier Science B.V. All rights reserved.