The Impact of Coupled and Decoupled Government Subsidies on Off-Farm Labor Participation of U.S. Farm Operators |
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Authors: | Mary Clare Ahearn Hisham El-Osta Joe Dewbre |
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Affiliation: | Mary Clare Ahearn and Hisham El-Osta are economists, Economic Research Service, U.S. Department of Agriculture (USDA). Joe Dewbre is an economist, Organisation for Economic Co-operation and Development (OECD). |
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Abstract: | 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. |
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Keywords: | ARMS decoupled payments farm households off-farm labor subsidies |
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