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Income Targeting and Farm Labor Supply

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  • Timothy J. Richards
Abstract
There is considerable anecdotal evidence that farm workers who are paid by piece rate tend to “income target,” or work only until they achieve a certain amount of daily income, and then stop work. We estimate reduced‐form and structural models derived from the reference‐dependent preference model of Koszegi and Rabin (2006) to test the income‐targeting hypothesis using data from the National Agricultural Workers Survey (NAWS). We find evidence that supports the income‐targeting hypothesis, in both the reduced‐form and structural econometric models. Our findings suggest that even higher piece rates may not help the widely reported shortage of agricultural labor on the intensive margin as labor‐supply curves can be backward bending.

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  • Timothy J. Richards, 2020. "Income Targeting and Farm Labor Supply," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(2), pages 419-438, March.
    • Handle: RePEc:wly:ajagec:v:102:y:2020:i:2:p:419-438
    DOI: 10.1002/ajae.12032
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    References listed on IDEAS

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    2. Alexandra E. Hill & Jesse Burkhardt, 2021. "Peers in the Field: The Role of Ability and Gender in Peer Effects among Agricultural Workers," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 790-811, May.
    3. Zachariah Rutledge & Pierre Mérel, 2023. "Farm labor supply and fruit and vegetable production," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(2), pages 644-673, March.
    4. repec:ags:aaea22:335461 is not listed on IDEAS
    5. Richards, Timothy J. & Rutledge, Zachariah, 2022. "Agricultural Labor and Bargaining Power," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322101, Agricultural and Applied Economics Association.
    6. Stephen F. Hamilton & Timothy J. Richards & Aric P. Shafran & Kathryn N. Vasilaky, 2022. "Farm labor productivity and the impact of mechanization," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1435-1459, August.
    7. Calvin, Linda & Martin, Philip & Simnitt, Skyler, 2022. "Adjusting to Higher Labor Costs in Selected U.S. Fresh Fruit and Vegetable Industries," USDA Miscellaneous 323872, United States Department of Agriculture.
    8. Timothy J. Richards, 2022. "Agribusiness and policy failures," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(1), pages 350-363, March.
    9. Jajati Keshari Parida & Shiba Shankar Pattayat & Sher Verick, 2023. "Why is the size of discouraged labour force increasing in India?," Economic Change and Restructuring, Springer, vol. 56(5), pages 3601-3630, October.
    10. Ray, Srabashi & Hertel, Thomas, 2022. "Assessing The Impact Of Conservation Policies On Rural Communities: The Role Of Labor Markets," Conference papers 333401, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Cho, Seung Jin & Lee, Jun Yeong & Winters, John V., 2020. "COVID-19 Employment Status Impacts on Food Sector Workers," ISU General Staff Papers 202006080700001107, Iowa State University, Department of Economics.
    12. Lee, Goeun & Beatty, Timothy, 2024. "Agricultural Burning and Agricultural-Worker Health," 2024 Annual Meeting, July 28-30, New Orleans, LA 343622, Agricultural and Applied Economics Association.
    13. Calvin, Linda & Martin, Philip & Simnitt, Skyler, 2022. "Adjusting to Higher Labor Costs in Selected U.S. Fresh Fruit and Vegetable Industries," Economic Information Bulletin 327354, United States Department of Agriculture, Economic Research Service.
    14. Yohannes , Dereje & Lindskog, Annika, 2023. "The Impact of Rainfall Shock on Child Labor: The Role of the Productive Safety Nets Program and Credit Markets in Ethiopia," EfD Discussion Paper 23-17, Environment for Development, University of Gothenburg.

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