HUMAN CAPITAL AND LABOR FLOWS OUT OF THE AGRICULTURAL SECTOR: EVIDENCE FROM SLOVENIA

This paper analyses of determinants of agricultural labor flows and the role of human capital in this process on the basis of the Slovenian Labor Force Surveys for the years 1993 to 1999. The household heads living in larger households, having a larger farm size, and working full-time (more hours per week) in permanent jobs are more likely to stay in agricultural employment. The empirical evidence clearly suggests that human capital plays a crucial role for labor mobility and labor adjustment. Young, female and educated individuals are more likely to enter into employment in non-agricultural, particularly service activities. There are remarkable circular flows of elderly and less educated persons between being employed in agriculture, unemployment and retirement pools. Small-scale and part-time farming provide temporary employment opportunities. Investments in human capital to improve quality of labor in agriculture and to increase mobility and flexibility of labor are the key issues in synergy reducing labor mismatch and improving efficiency in labor flow adjustment.