Farm Income Variability and the Supply of Off‐Farm Labor

Abstract

If farmers are risk averse, greater farm income variability should increase off‐farm labor supply. This effect is confirmed for a sample of Kansas farmers. Off‐farm employment of farmers and their spouses is also found to be significantly influenced by farm experience, off‐farm work experience, farm size, leverage, efficiency, and farm‐specific education. In addition, farm operators and spouses who receive significant income support through government farm programs are less likely to work off the farm. This may suggest that policy changes reducing farm income support payments may increase off‐farm employment of farmers and their spouses.