The Impact of Coupled and Decoupled Government Subsidies on Off-Farm Labor Participation of U.S. Farm Operators

Posted: 8 May 2006

See all articles by Mary Clare Ahearn

Mary Clare Ahearn

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Hisham S. El-Osta

U.S. Department of Agriculture (USDA)

Joe Dewbre

Organization for Economic Co-Operation and Development (OECD)

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.

Keywords: ARMS, decoupled payments, farm households, off-farm labor, subsidies

Suggested Citation

Ahearn, Mary and El-Osta, Hisham S. and Dewbre, Joe, The Impact of Coupled and Decoupled Government Subsidies on Off-Farm Labor Participation of U.S. Farm Operators. American Journal of Agricultural Economics, Vol. 88, No. 2, pp. 393-408, May 2006, Available at SSRN: https://ssrn.com/abstract=896340 or http://dx.doi.org/10.1111/j.1467-8276.2006.00866.x

Mary Ahearn (Contact Author)

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
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HOME PAGE: http://www.ers.usda.gov/AboutERS/Bios/view.asp?ID=mahearn

Hisham S. El-Osta

U.S. Department of Agriculture (USDA) ( email )

1800 M. Street NW
FSP Branch, RED Room N4119
Washington, DC 20036-5831
United States

Joe Dewbre

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

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