Labour Supply of Aged Farmers in Japan

There is a rapid trend towards an ageing society in Japanese rural areas; aged farmers thus play an important part in agricultural production. The purpose of this paper is to analyse labour supply behaviour of aged farmers. After clarifying the main features of their labour supply, a labour supply function is estimated using data from the 1985 Survey of the Farm Household Economy. Major findings are that; (1) aged farmers sometimes gain pleasure from working in agriculture, but their estimated wage and econome affect whether they decided to be permanent or supplementary workers; (2) the participation rate in agriculture of aged females tends to increase if their husbands work in agriculture; (3) regional differences in probabilities of aged farmer employment can be explained by the income and wage effect and type of farming; and (4) pension payments for farmers have a negative effet on labour supply of the elderly; i.e., the participation rate in the agricultural labour force decreases about 7 percent because of pension payments