We identify the effects of alternative explanatory variables on the propensity of U.S. farmers to cease farming, with a particular emphasis on understanding the roles of off‐farm employment and federal farm program payments. Conventional ordinary least squares analysis using all counties suggests that off‐farm employment has no statistical effect on the (net) number of farmers quitting between 1987 and 1997, ceteris paribus . A more refined analysis, which separates counties losing farmers from those that gained farmers, reveals subtle and less clear‐cut effects of off‐farm employment (and federal program payments) on farm exits.
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Goetz et al. (2001) studied this question.
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