Testing an Off-Farm Labor Supply Model in an LDC

摘要

Although studies have shown off-farm labor (OFL) to be a key source of income for poor rural families in developing countries, the effect of off-farm wage rates on OFL supply remains unclear. This paper reports on a test of a model for analyzing this issue using data from 188 rural households in the Philippines. In the model, the time allocated to OFL by husbands and wives is a function of own on-farm and off-farm wage rates, nonearnings income, and several environmental variables noted below. Results suggest that area small farmers respond to wage rates in allocating household labor time and that farm and household characteristics are significant in explaining response to off-farm wage rates. The model needs to be refined to include children's wage and time allocation and their impact on adult labor supply; to analyze the process of household response to OFL opportunities; and to relate successful OFL to migration decisions. An 11-item bibliography (1958-78) is appended.