Published in European Review of Agricultural Economics 35:1-28, (2008)
Using 14 waves of panel data, this paper investigates why employees entering the primary sector exit subsequently. Transition probabilities are explained by a rich set of individual, regional and sectoral characteristics and a discrete-time competing risks model with unrestricted base-line hazards is used to distinguish between exits into a job in other sectors and other exits. The results confirm Jovanovic's suggestion of ‘survival of the fittest matches’ as workers and firms learn more about the quality of the match between them. It is found that agricultural education, higher income and sector wage differences are the main determinants of the hazard of moving to another sector, whereas marriage and higher education lower the hazard of leaving for non-employment.
Keywords: Inter-sectoral transitions, discrete-time competing risks model, hired labour, earnings, agriculture