What motivates farm couples to seek off-farm labour? A logit analysis of job transitions
Erik Biørn and Hild-Marte Bjørnsen
European Review of Agricultural Economics 2015 42 (2) pp. 339-365
Some labour market consequences of transitions in the agriculture sector are examined by combining 20-year unbalanced panel data from Norwegian farm households and logit modeling of transition probabilities. The multi-dimensionality of the problem follows from two decision makers having four possible choices in each period: the farm operator and spouse can be working fully on the farm or having supplementary outside occupation. Transitions are modeled by five logit models. The most flexible model has a high number of parameters. Overall, the results indicate that transitions have mainly been directed towards the state where both partners work off the farm. An increasing livestock reduces the probability of moving to states with substantial off-farm labour participation. Increasing farm size tends to have the opposite effect. Recent on-farm investments come out with ambiguous effects. Having children seems to motivate operators to withdraw from off-farm labour and spouses to stay in or enter off-farm employment.