Labour supply and employment decisions on agricultural households in Slovenia

Abstract

The paper attempts to quantify determinants influencing labour allocation decisions on agricultural households in Slovenia by application of an agricultural household model. The analysis investigates employment decisions of farm holders and their spouses, using the Census of Agriculture 2000 dataset. Results reveal that bulk of the farm labour input is performed by the work on a part-time basis, or by the work of household members surpassing active employment age. Employment decisions of the reference persons are most frequently linked with off-farm employment. Limited production capacities of farm holdings allow for full-time employment of one person at the most, on-farm employment being usually attributed to the farm holders. Holders’ employment status is primarily dependent on farm characteristics, own human capital, and personal preferences. Favourable conditions at the non-farm labour markets (‘demand-pull’ determinants) tend to increase probability of off-farm employment. Employment decisions of the partners (and presumably other household members) are in most cases narrowed to the choice between various alternatives of off-farm employment. On-farm employment prospects increase with the economic size of agricultural holding and eventual existence of a supplementary activity on the farm. The paper concludes by summarising main results and discussing their policy implications. Discussion confronts various policy objectives linked with agricultural employment and rural labour markets and calls for more elaborate set of measures to tackle them.