Structural Models and Econometrics

Trygve Haavelmo

Published in:

Econometric Theory, volume 31, (1), pp. 85-92.

DOI: 10.1017/S0266466614000206


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 modelling 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 modelled 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.

Published Apr. 7, 2015 11:44 AM - Last modified Dec. 16, 2015 2:23 PM