Pork production has evolved from relatively small, family-run operations toward large-scale operations with several employees. Important questions about the structure of compensation in this rapidly changing labor market are answered using probit and ordered probit models and data from a national survey of pork producers and their employees. The results suggest (i) the structure of wages in pork production is consistent with more developed labor markets; (ii) employees earn a wage premium for using advanced technology and working in larger operations; and (iii) employees are willing to accept lower wages in exchange for better benefits and working conditions.
Bibliographical noteFunding Information:
Terrance M. Hurley is assistant professor in the Department of Environmental and Natural Resource Economics at the University of Rhode Island. James Kliebenstein and Peter F.Orazem are professors in the Department of Economics at Iowa State University. This research benefited from helpful conversations with Marvin Hayenga and John Lawrence, the comments of two anonymous referees, and the comments of Spiro Stefanou. Richard Hugdahl, Mark Imerman, Garry Pshonik, and the staff at NPPC helped the authors to obtain the data used in the analysis. Partial support from the National Pork Producers Council is gratefully acknowledged. Journal Paper No. J-17129 of the Iowa Agriculture and Home Economics Experiment Station, Ames, Iowa, project No. 3235, and supported by Hatch Act and State of Iowa funds. I This is a variant of the survival analysis first introduced by George Stigler. Stigler argued that the curve can be interpreted as indicating the shape of the long-run average cost curve. 2 The shift toward large farms is also evident in Agricultural Census data that shows that hog inventories increased by almost 4%, while the number of farms with hogs in inventory fell by over 40% between 1982 and 1992.
- Earnings functions
- Hog production