Links among Farm Productivity, Off-Farm Work, and Farm Size in the Southeast

This paper examines the linkages among agricultural total factor productivity, farm size, and farm household participation in the off-farm labor market for the Southeastern states for the period 1960-1996. We find evidence of a simultaneous relationship between productivity and measures of farm structure. The results support the expected relationships between the endogenous variables, namely that productivity and farm size are positively related, farm size and off-farm work participation are negatively related, and off-farm work and productivity are negatively related. We find positive and significant impacts of government policies (investments in public research, extension, and highways) on productivity growth.