True State Dependence and Heterogeneity in Off-Farm Labour Participation

Posted: 25 Jul 2000

See all articles by Alessandro Corsi

Alessandro Corsi

University of Turin - Department of Economics and Statistics

J.L. Findeis

College of Agricultural Sciences, Department of Agricultural Economics and Rural Sociology

Abstract

This paper discusses models of off-farm labour participation estimated with panel data. With this kind of model, unexplained persistence in a labour state may be due to true state dependence (when a previous state modifies attitudes, constraints or parameters) and/or to heterogeneity (unobservable permanent individual characteristics). Probit models assuming either heterogeneity or true state dependence are estimated from a two-period panel survey of Pennsylvania farms, and compared with cross-section or pooled sample models. Statistical tests to infer the source of persistence are proposed. The results suggest that for Pennsylvania farmers and spouses, in addition to other personal, household and farm characteristics found to be important in previous studies, previous off-farm labour state is relevant in off-farm labour participation decisions.

Keywords: Off-Farm Labour, Agricultural Models, True State Dependence, Probit Model

JEL Classification: J21, Q12

Suggested Citation

Corsi, Alessandro and Findeis, Jill Leslie, True State Dependence and Heterogeneity in Off-Farm Labour Participation. Available at SSRN: https://ssrn.com/abstract=231739

Alessandro Corsi

University of Turin - Department of Economics and Statistics ( email )

Lungo Dora Siena, 100
Torino, 10153
Italy

Jill Leslie Findeis (Contact Author)

College of Agricultural Sciences, Department of Agricultural Economics and Rural Sociology ( email )

University Park, PA 16802-3306
United States
+1 814 863 8246 (Phone)

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