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Examining Labor Substitution: Does Family Matter for U.S. Cash Grain Farmers?

Published online by Cambridge University Press:  26 January 2015

Jeremy M. D'Antoni ,
Aditya R. Khanal  and
Ashok K. Mishra
Jeremy M. D'Antoni
Affiliation:
Economic Research Service, U.S. Department of Agriculture, Washington, DC
Aditya R. Khanal
Affiliation:
Department of Agricultural Economics and Agribusiness, Louisiana State University and Louisiana State University AgCenter, Baton Rouge, Louisiana
Ashok K. Mishra
Affiliation:
Department of Agricultural Economics and Agribusiness, Louisiana State University and Louisiana State University AgCenter, Baton Rouge, Louisiana
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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.

Keywords

cash gainsfamilyfarm laborheterogeneityhired laborhomogeneitylaborseemingly unrelatedsubstitutionD13J22J23Q12Q18R38
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 46 , Issue 2 , May 2014 , pp. 273 - 284
Copyright
Copyright © Southern Agricultural Economics Association 2014

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