The Potential Impact of Changes in Immigration Policy on U.S. Agriculture and the Market for...

"Large shifts in the supply of foreign-born, hired farm labor resulting from substantial changes in U.S. immigration laws or policies could have significant economic implications. A computable general equilibrium (CGE) model of the U.S. economy is used to evaluate how changes in the supply of foreign-born labor might affect all sectors of the economy, including agriculture. Two scenarios are considered: an increase in the number of temporary nonimmigrant, foreign-born farmworkers, such as those admitted under the H-2A Temporary Agricultural Program, and a decrease in the number of unauthorized workers in all sectors of the economy. Long-run economic outcomes for agricultural output and exports, wages and employment levels, and national income accruing to U.S.-born and foreign-born, permanent resident workers in these two scenarios are compared with a base forecast reflecting current immigration laws and policies." (Abstractor: USDA).

Full Publication Title: The Potential Impact of Changes in Immigration Policy on U.S. Agriculture and the Market for Hired Farm Labor: A Simulation Analysis

• The expanded employment of temporary nonimmigrant agricultural workers would lead to a long-run relative increase in agricultural output and exports. The increases are generally larger in labor-intensive sectors, such as fruits, tree nuts, vegetables, and nursery products.
• While agricultural output and exports would increase by year 15, the real wages of agricultural workers would decrease by 4.4 percent in the long run, relative to the forecasted wage with no policy-induced labor supply change. Increased employment of temporary nonimmigrant agricultural workers would have little effect on the nonagricultural economy, since hired farmworkers make up a small share of the U.S. workforce.
• By contrast, a large reduction in the number of unauthorized workers in all sectors of the U.S. economy would lead to a long-run reduction in output and exports in both agriculture and the broader economy, relative to forecasted levels with no policy-induced change in unauthorized labor supply.
• Real agricultural wages would rise, on average, from 3.9 to 9.9 percent in the long run, relative to the forecasted wage with no policy-induced labor supply reduction. Since unauthorized farmworkers would be in much shorter supply, their wages would increase from 13.6 to 39.8 percent.
• Decreasing the size of the unauthorized labor force would reduce the aggregate level of economic production and slightly lower the income that accrues to complementary, U.S.-owned factors of production, such as capital and skilled labor.
• Among the additional U.S.-born and other permanent resident farmworkers are some people who lost (slightly) higher paying jobs as the economy contracted due to the decreased supply of unauthorized labor in all sectors of the economy. This downward shift in occupational composition reduces the average real wage of all U.S.-born and other permanent resident workers, agricultural and nonagricultural, from 0.3 to 0.6 percent compared with the base forecast, even as real wages rise in many lower paying occupations.

(Abstractor:Author)

• Last Updated:
• Created:
• Resource Publication Date: 2012
• Author(s): Zahniser, Steven; Hertz, Tom; Dixon, Peter; Rimmer, Maureen
• Organizational Author(s): Economic Research Service, United States Department of Agriculture
• Funding Source: U.S. Department of Agriculture
• Resource Availability: Publicly available
• Posted by: Gloria Salas-Kos
• Posted in: Workforce System Strategies