Abstract
AbstractThis paper develops and tests a dynamic, stochastic model of seasonal labor demand of farm households in a developing country. Seasonality in agriculture is modeled as a dynamic two stage process (planting and harvesting) with sequential dependence of decisions. Yield risk is an important determinant of behavior in the planting stage only. The proposed model is estimated using plot‐specific cross‐section time‐series data from India. Consistent estimates of the male and female labor demand functions in the planting and harvesting stages are obtained by panel data econometric methods that control for the nonseparability of the model.
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