Erschienen in:Factor Markets Working Paper ; No. 31
Umfang:
1 Online-Ressource (10 p)
Sprache:
Englisch
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 22, 2012 erstellt
Beschreibung:
This paper presents a theoretical model for the analysis of decisions regarding farm household labor allocation. The agricultural household model is selected as the most appropriate theoretical framework; a model based on the assumption that households behave to maximize utility, which is a function of consumption and leisure, and is subject to time and budget constraints. The model can be used to describe the role of government subsidies in farm household labor allocation decisions; in particular the impact of decoupled subsidies on labor allocation can be examined. Decoupled subsidies are a labor-free payment and as such represent an increase in labor-free income or wealth. An increase in wealth allows farm households to work less while maintaining consumption. On the other hand, decoupled subsidies represent a decline in the return to farm labor and may lead to a substitution effect, i.e., farmers may choose to substitute non-farm work for farm work. The theoretical framework proposed in this paper allows for the examination of these two conflicting effects