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The Impact of Coupled and Decoupled Government Subsidies on Off‐Farm Labor Participation of U.S. Farm Operators
Author(s) -
Ahearn Mary Clare,
El-Osta Hisham,
Dewbre Joe
Publication year - 2006
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2006.00866.x
Subject(s) - subsidy , receipt , payment , government (linguistics) , labour economics , business , economics , direct payments , farm income , agricultural economics , income support , production (economics) , finance , market economy , linguistics , philosophy , accounting , macroeconomics
With the 1996 Farm Act, the United States introduced payments that were designed to be “decoupled.” Labor allocation choices are likely to be affected by receipt of payments, and income from off‐farm jobs has been the major source of income for most farm households for sometime. This article examines whether the 1996 change has affected the off‐farm labor participation of farm households. We conclude that the observed increase in off‐farm participation of farm operators who received payments was not the result of the 1996 policy change. Government payments, whether coupled or decoupled, have a negative effect on off‐farm labor participation.