Can off farm employment affect the privatization of social safety net? The case of self-employed farm households

This study uses a two-stage econometric framework with farm household level data to investigate whether off-farm work of operators and spouses influences healthcare expenditures and retirement savings. Results indicate that agricultural policy discourages off-farm work by farm operators and spouses. However, off-farm work decisions of farm couples significantly decrease healthcare expenditures and increase retirement savings of farm households in the US. The effect of farm spouse's off-farm employment on household retirement saving is more pronounced. These conclusions can extend to middle-income countries where off-farm work may enable farmers to afford better healthcare and retirement pension plans.

► Less attention has been paid to the association between off-farm employment, healthcare expenses, and retirement savings. ► We investigate the effects of off-farm work on healthcare expenditures and retirement savings among the US farm households. ► We find family healthcare expenditures are lower if the operator and spouse work off-farm. ► We find farm households whose operator and/or spouse work off-farm have higher retirement savings.