Off-farm employment and economic crisis: Evidence from Cyprus

Abstract

Off-farm employment is an important strategy for complementing farm household income and maintaining rural livelihoods. A multilevel logistic regression model was applied to investigate the effect of farm-level and regional-level factors on off-farm employment in Cyprus during the recent economic crisis period. The performance of nonfarm sectors positively affects off-farm employment; a one-percent increase in the share of the secondary and tertiary sector employment increases the likelihood of off-farm work by 9.5 times. The importance of location was also identified. Farm households located in rural areas are 70% less likely to engage in off-farm work than households located in urban areas. The positive effect of educational attainment and the negative effect of farm training confirmed the importance of human capital characteristics on off-farm labour participation. Farm structural factors are also significant determinants of off-farm employment. A one-hectare increase in the farm size decreases the odds of off-farm labour participation by 50%. Operators of crop farming holdings are 4.2 times more likely to work off the farm than operators of livestock and mixed-farming holdings. The results reveal the importance of adopting a multilevel and integrated approach for the analysis of off-farm employment.