Determinants of off-farm employment among Oregon farm households : a tobit analysis

Graduation date: 1996An investigation was conducted to determine the impact of economic and\ud non-economic factors on the off-farm work efforts of Oregon farm husbands and\ud wives. A total of 283 Oregon farm households (with husbands and wives) were\ud randomly selected from lists of persons deferring taxes for farm purposes, obtained\ud from County Assessors' offices in each of eight randomly selected counties.\ud Counties with larger number of farms had a higher probability of being selected.\ud Data came from an Oregon State University Agricultural Experiment Station study\ud conducted during 1988-89.\ud The empirical findings from the maximum likelihood Tobit model showed\ud plausible directional impacts. Off-farm wage rate, the basis of a reduced labor\ud supply model, was the key variable in explaining off-farm work. Wives' off-farm work\ud response to off-farm wage was more elastic when compared to husbands' off-farm\ud work. Additional significant variables to affect either or both husbands' and wives'\ud total off-farm work were total farm debt, husband's age, education, urban/rural\ud location of farm, net farm income, age-square, farm life satisfaction, and total family\ud income before tax.\ud Education was positively related to off-farm work only for wives. Results also\ud indicate that high levels of net farm income as well as farm debt reduce the\ud likelihood and extent of off-farm work. The location of the farm closer in proximity to\ud metropolitan areas, was a significant factor in increased off-farm work hours.\ud Farm life satisfaction was negatively significant for both wives and husbands.\ud The effect of farm life satisfaction was more prominent for wives than for husbands.\ud Total family income was significant and negatively related to wives' off-farm work\ud but not husbands, indicating that women may be more sensitive to a choice for\ud leisure or household work and the motivation for husbands' off-farm work may be\ud higher. Despite a substantial incidence of low profitability and low farm income from\ud farming and some unhappiness and hard work, these farmers generally reported a\ud high level of satisfaction with their farming operations. Any policy implications based\ud on the findings of this study must be cautiously interpreted based on farm types and\ud the work motivation of farmers in Oregon