Journal
AMERICAN JOURNAL OF AGRICULTURAL ECONOMICS
Volume 88, Issue 2, Pages 393-408Publisher
BLACKWELL PUBLISHING
DOI: 10.1111/j.1467-8276.2006.00866.x
Keywords
ARMS; decoupled payments; farm households; off-farm labor; subsidies
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With the 1996 Farm Act, the United States introduced payments that were designed to be decoupled. Labor allocation choices are likely to be affected by receipt of payments, and income from off-farm jobs has been the major source of income for most farm households for sometime. This article examines whether the 1996 change has affected the off-farm labor participation of farm households. We conclude that the observed increase in off-farm participation of farm operators who received payments was not the result of the 1996 policy change. Government payments, whether coupled or decoupled, have a negative effect on off-farm labor participation.
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