Abstract
We estimate a full system of structural farm and off-farm labor supply equations of farm couples as a set of simultaneous equations with categorical dependent variables. In a first step, the reduced form is estimated by ordered probit with unknown thresholds. Then, the identified structural coefficients are recovered from the reduced-form coefficients through minimum distance estimation. Using census data from Israel, we find that for men, a one-hour increase in farm labor supply causes a one-hour decrease in off-farm labor supply, but not for women. This could not have been found without estimating structural coefficients.
Original language | English |
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Pages (from-to) | 687-698 |
Number of pages | 12 |
Journal | American Journal of Agricultural Economics |
Volume | 78 |
Issue number | 3 |
DOIs | |
Publication status | Published - Aug 1996 |
Externally published | Yes |
Keywords
- Categorical dependent variables
- Farm labor supply
- Minimum distance estimation
- Off-farm labor supply
- Structural simultaneous equations
ASJC Scopus subject areas
- Agricultural and Biological Sciences (miscellaneous)
- Economics and Econometrics