This study was conducted at the Institute of Agricultural and Resource Economics, University of Agriculture, Faisalabad, Pakistan during the year 2013-14. The underlying research investigated the labor supply decisions and jointly determined earnings of male and female members of household using cross-sectional data of 341 rural households of Punjab province. Data were collected from six districts of Punjab (Sahiwal, Lahore, Layyah, Muzaffargarh, Sialkot and Khushab). Heckman’s two step method was used to correct selection bias for wage and labor supply equations. In first step, bivariate probit model was used to determine the probability of participation of male and female in non-farm work. The participation equation revealed that education, experience, adult household size and physical infrastructure tended to positively and significantly influence the probability of participation of both male and female in non-farm work. On the other hand, lack of access to physical assets such as land, livestock, non-labor income and the presence of children in household, decreased their participation in non-farm work. In the second step, wage and labor supply equations were estimated. Education, experience, infrastructure, distance to market, land appeared to be important determinants for wage and labor supply of both male and female. For instance, infrastructure development increased the earnings of male and female upto 25.9 and 13.9 percent respectively. The labor supply equation revealed that average weekly hours in non-farm work were around 30 and 5.42 for males and females, respectively. It was observed that men spent more time in non-farm activities than female. The study revealed that policy makers should emphasis to overcome the obstacles of participation in non-farm earning activities which were essential to improve the economic conditions of farm households.
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