Analysis of off -farm employment and income in Nebraska

The two objectives of the study are to review and compare the changes in structure and composition of off-farm employment in Nebraska between 1970\u27s and 1990\u27s, and to investigate the affect of farm characteristics, household characteristics, and local labor market conditions on off-farm employment in Nebraska in the mid 1990\u27s. To study the changes in structure and composition of off-farm employment, the Census of Agriculture data is analyzed for the years 1974 and 1997. To study the influence of farm, household, and labor market characteristics on off-farm income, a Tobit maximum likelihood analysis was performed using 1994 primary data from 1994 Nebraska farm financial survey. The key findings of analyzing the first objective are: Between 1974 and 1997, off-farm employment has increased across all farms with size less than 1000 acres, especially in farms with sizes between 180 and 500 acres. This reveals that between 1974 and 1997, dependency on off-farm income increased in small and marginal farms with size less than 1000 acres. Participation in off-farm employment increased in all age groups studied that are below 65 years. Also, higher steady participation in off-farm employment is evidenced until the age of 55 years in 1997 as opposed to declining participation in off-farm employment as age progressed, in 1974. Also, the proportion of corporate farms to that of the total farms doubled between 1974 and 1997 and during the same time, there has been a significant decrease in farms with sizes between 180 and 500 acres. While the average off-farm employment (for any number of days by either operator or spouse) participation rates in the U.S., and Nebraska are around 75 percent, off-farm wages constituted only 30 percent of household income in Nebraska against a national average of 46 percent. The Tobit analysis revealed that farm size, farming experience, household human capital, and farm organizational-type influenced the off-farm income significantly. One important outcome of the study was that the labor market conditions are pretty uniform across Nebraska compared to the U.S., and they did not significantly influence the off-farm incomes in Nebraska. The results clearly show the differences in labor market conditions between Nebraska and the U.S. The main policy implication from this study is to focus on human capital development for farm households under 1000 acres. Policy should be geared not to merely increase off-farm employment but to capitalize on the synergy between farming and off-farm employment because a third of the households depended on off-farm employment for health insurance