SOUTHERN JOURNAL OF AGRICULTURAL ECONOMICS JULY 1990 THE IMPACT OF LOCAL LABOR MARKET CONDITIONS ON THE OFF-FARM EARNINGS OF FARM OPERATORS

Abstract the factors that influence off-farm earnings are un-Local labor market characteristics are theoreti- doubtedly specific to individuals, such as human cally relevant to the determination of off-farm earn- capital, it is plausible that community characteristics ings of farm operators, but the empirical analysis of also play a role in the ability of farm operators to these effects has been hindered by a lack of appro- gain access to off-farm earnings. To the extent that priate data. This study employs the new census the local economicenvironment affects the capacity public use micro-data sample, PUMS-D, to investi- of a farm operator to realize off-farm earnings, the gate the effect of local labor market characteristics potential may exist for state or Federal policy to on off-farm earnings of farm operators. The PUMS- enhance the off-farm earning capacity of farm oper-D data allow local characteristics to be defined on a ators. Because most of the benefits of commodity labor market area basis, rather than on a political programs accrue to large farm operators and land boundary basis. For a sample of Georgia farm oper- owners (USDA, 1986), rural development efforts to ators, local labor market size, unemployment rates, improve off-farm earning potential may represent a and industrial structure er un to e n more efficient methofound hav sig ifof assisting small farm oper-cant impacts on off-farm employment and earnings. ators than commodity programs