The Supply of Off‐Farm Labor: A Random Coefficients Approach

Abstract

Abstract A joint model of off‐farm labor decisions for farm operator and spouse is presented. Attention is given to operator and spouse participation decisions as well as associated problems of multiple sample selectivity biases. Two‐stage fixed and random coefficient methods, corrected for possible selectivity biases, are used to estimate supply function parameters. Results indicate that supply function parameters are random. Variation in important supply parameters is investigated. Results also illustrate the importance of spouse decisions on off‐farm labor supply function structure.