Off-Farm Work Decisions of Husbands and Wives: Joint Decision Making

Abstract

Theoretical and econometric models are developed to examine joint wage-labor participation and hours decisions of a husband and wife in farm households. The econometric model is multiple equation and recursive. The specification of the off-farm labor supply equation of the husband (wife) depends on whether his (her) wife (husband) does or does not work off-farm, and this structure is endogenous. The model is fitted to data for Iowa farm households. The main conclusion is that the off-farm labor supply equation of a married individ- ual differs significantly depending on whether his or her spouse also works for a wage.

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