Changing crude oil price effects on US agricultural employment
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Abstract
The effect of changes in the price of crude oil on agricultural employment in the USA between 1947 and 1995 is investigated. After reviewing previous assessments of the issue, the existence of an empirical relationship between agricultural employment and crude oil price changes is established using Granger causality. Subsequently, the nature of the relationship is estimated with the results suggesting that at least three full years are required before the measurable effects of a percentage change in the real price of crude oil on the change in agricultural employment are exhausted. Finally, the structural stability of the functional relationship between the change in agricultural employment and changes in the price of crude oil, the percentage changes in expected net farm income, realized technological innovation, and the wage rate is studied.