CHANGING CRUDE-OIL PRICE EFFECTS ON US AGRICULTURAL EMPLOYMENT

The effect of changes in the price of crude oil on agricultural employ ment in the USA between 1947 and 1995 is investigated. After reviewing previous assessments of the issue, the existence of an empirical rela tionship between agricultural employment and crude oil price changes i s established using Granger causality. Subsequently, the nature of the relationship is estimated with the results suggesting that at least t hree full years are required before the measurable effects of a percen tage change in the real price of crude oil on the change in agricultur al 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 expec ted net farm income, realized technological innovation, and the wage r ate is studied.