Doctoral Dissertations

Date of Award

6-1972

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Agricultural Economics

Major Professor

L. L. Bauer

Committee Members

L. H. Keller, T. J. Whatley, K. E. Phillips

Abstract

This study analyzed the effects of technology on the farm labor market. The basic hypothesis was that agricultural technological advancement has been and still is an important determinant of low returns to farm labor, unemployment, and underemployment. Furthermore, technology can act as (1) an initial stimulus in generating these conditions in the farm labor market and (2) as a major contributor to the persistence of the problems along with other conditions affecting the farm labor market. Two objectives were established in order to test the hypothesis. The objectives were (1) to estimate the effect of technology on the farm labor market and (2) to estimate the distributed lag function or time path of this effect. The six-equation conceptual model, consisting of the demand and supply of farm labor, the demand and supply of aggregate farm product, and the equilibrium identities for the two markets, was specified. The major distributed lag techniques used in dynamic analyses of economic phenomena were examined and evaluated. The general poly-nomial distributed lag technique was selected based upon this evaluation for use in this study. The statistical model was specified subject to the limitations imposed by the data, the distributed lag technique, and the method of estimation. A time series of cross sections of state data was used. Technology was represented by the proxy variable, research and extension expenditures. Deflated data on research and extension expenditures for the years 1889 through 1964 were used. Data for all of the other varia-bles in the model included the years 1949 through 1964. Behavioral theory on distributed lags was limited. Hence, the configuration of the optimum lag distribution showing the distributed lag effect of technology on the demand for farm labor was unknown. As a result, several alternative structures were estimated. They included alternative lag polynomials from zero degree through fifth degree at various lag intervals from 0 through 60 lagged years on technology. Four choice criteria were used in selecting the optimum distribution from these estimated alternatives. They were (1) judgment, (2) the signs of the calculated weights, (3) the close similarity of the lag weights among distributed lags of optimal and longer length, and (4) reasonableness of the magnitude of the weights. The statistical analysis was performed using a least-squares regression technique. The simultaneous system was overidentifled so the two-stage least-squares estimation method was employed. No optimal lag function was selected because all estimated functions failed to satisfy one or more of the selection criteria. However, one alternative structure was selected as the least unreasonable for the purpose of demonstration. The results of this estimated struc-ture indicated that technology had a positive influence on the demand for farm labor. This result did not agree with the prior expectations hypothesized in the conceptual model. Furthermore, the estimated coefficient on technology was less than its asymptotic standard error. None of the stated objectives were attained. Consequently, no substantive conclusions regarding the distributed lag effects of technology on the farm labor input could be drawn. However, some con-clusions were drawn regarding the analytical approach taken. The major conclusion was that this specific application of general poly-nomial, finite distributed lags in a simultaneous equation framework which did not constrain or restrict the signs and magnitudes of the lag weights, permitted too much freedom in the estimated structures by allowing the data to determine the optimum distribution. A logical redirection would be to convert from regression analysis to quadratic programming and to incorporate restrictions on the lag weights. Other redirections were also suggested.

Download
Files over 3MB may be slow to open. For best results, right-click and select "save as..."

Share

COinS