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

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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 the 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 individual differs significantly depending on whether his or her spouse also works for a wage.

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