Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 05/2006: THE JOINT LABOUR DECISIONS OF FARM COUPLES: A CENSORED RESPONSE ANALYSIS OF ON-FARM AND OFF-FARM WORK

Hild-Marte Bjørnsen () and Erik Biørn ()
Additional contact information
Hild-Marte Bjørnsen: Norwegian Institute for Urban and Regional Research, Postal: Sinsenveien 47 B, P.O.Box 44 Blindern, N-0313 Oslo, Norway
Erik Biørn: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway

Abstract: Farm couples' labour market responses are partly the qualitative choice of entering the ff-farm labour market and partly the continuous choice of the number of on-farm and off-farm working hours, given entry. Such a setting is interesting when examining the increasing occurrence of multiple job-holdings among farmers in western economies. This paper presents a unified framework for handling such discrete/continuous choices, involving optimisation of farm production, household consumption, and multiple job-holdings for both husband and wife. A two-equation censoring panel data model is implemented and estimated from Norwegian panel data for 342 farms observed over a ten-year period.

Keywords: Labour; supply.; Agriculture.; Multiple; job-holding.; Time; allocation.; Bivariate; censoring.; Panel; data.; Heterogeneity

JEL-codes: C34; D21; J22; J43

52 pages, March 15, 2006

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