The off-farm labour-supply and farm/off-farm labour reallocation of farm operators: A conceptual framework and empirical stud

The off-farm labour-supply and farm/off-farm labour reallocation decisions of Canadian census farm operators are examined using home production theory. Modelling the latter decision provides a framework for analyzing changes in the working status of operators. Three working states were defined in this framework: full-time farming, part-time farming, and exit from farming. The Tobit model of off-farm labour-supply was rejected in favour of a separate Probit model for off-farm labour participation and a Truncated Regression model for off-farm labour-supply. It is determined that human capital characteristics tend to have a mixed effect on off-farm labour participation and off-farm labour-supply. The general impact of farm and family characteristics as well as other income sources largely confirm results of previous studies. Labour market conditions generally perform poorly as determinants of off-farm labour participation and off-farm labour-supply.;The marginal probability of full-time farming tends to decline with human capital characteristics. Farm characteristics have a mixed impact on the marginal effects of full-time farming. In general, family characteristics have a positive impact on the probability of full-time farming. The effects of labour market conditions on the probability of full-time farming tend to be insignificant. In contrast, human capital characteristics generally increase the likelihood of farming part-time. Farm characteristics tend to have a negative impact on the marginal effects of part-time farming. In general, family characteristics have different impacts on the probability of part-time farming. Sources of other income tend to reduce the likelihood of farming part-time. The marginal effects of labour market conditions tend to be insignificant. The probability of exit from farming generally declines with human capital characteristics. Farm characteristics have mixed effects on the likelihood of leaving farming. Family characteristics and other income sources tend to reduce the likelihood of exiting farming. The marginal effects of labour market conditions on the probability of exiting farming tend to be insignificant.