Research in Agricultural and Resource Economics

Abstract:
Analysis of nationally representative individual-level panel data from 1980 to 2010 reveals a significant negative trend in the agricultural labor supply from rural Mexico, which is the primary source of hired workers for U.S. farms. These findings offer an explanation for the rise over time in U.S. farm wages. Concomitants of the agricultural transformation, including growth in the non-farm economy, falling birth rates, and an increase in rural education, accelerate the transition of rural Mexicans out of farm work. Higher U.S. farm wages and increased border enforcement slow the transition, but the combined impact of these offsetting variables is relatively small. A diminishing farm labor supply has far-reaching implications for farmers, farm labor organizers, rural communities, and agricultural workers.

Download the paper | Read more >>

International Migration, Remittances, and the Impact of the Great Recession on Rural Mexico

Taylor, J. Edward, Mateusz Filipski, Justin Kagin, et. al.

This chapter uses a local economy-wide model to evaluate impacts of the 2008–9 global recession in rural Mexico. The model is calibrated using household panel data; a recursive-dynamic version of the model makes it possible to examine long-term as well as short-term impacts. The recession’s immediate effects get transmitted to rural Mexico through migrant remittances, which fall by an estimated 45%. Simulations reveal that each dollar of lost remittances reduces nominal income in rural Mexico by $1.73, as economic activity in local economies contracts. Households without migrants lose 33 cents of income per dollar of remittances lost by households with migrants. Declines in consumption prices partially mitigate welfare losses in the short run. In the long run, lower savings and investment compound the recession’s negative impacts and lead to a convergence of incomes between households with and without migrants.

Download the chapter | Read more >>

Economy-wide Impact Evaluation

Taylor, J. Edward and Mateusz Filipski (Affiliate in Economics)

Many funders, including international development banks, require that a cost-benefit analysis be carried out prior to the approval of project loans. Potential benefits of tourism projects include not only increased tourism receipts but also the employment and income multipliers they generate within the economy. Tourists rarely transact directly with the poor; thus, the poverty impacts of tourism development are largely indirect. Conventional cost-benefit analysis is likely to miss many if not most of these impacts, biasing cost-benefit analysis against funding tourism-development projects. This chapter describes a methodology for cost-benefit analysis that encompasses both the direct and indirect benefits and costs of projects. It applies this methodology to a variety of tourism-development projects in Latin America. The methods in this chapter are potentially applicable to cost-benefit analysis of other types of projects whose net benefits include indirect impacts on actors not directly affected by the project.

Download the chapter | Read more >>

Migration and Fuel Use in Rural Mexico

Manning, Dale T. (Affiliate in Economics) and J. Edward Taylor

Many households in developing countries rely on renewable natural resources as their main source of energy. Collecting and burning firewood requires a considerable amount of time, has negative health consequences, and can cause deforestation and depletion of local resources if forests are not properly managed. A transition from traditional to modern fuels can benefit households by reducing these negative effects. Migration, a quintessential feature of development, may facilitate this transition, but its impacts on fuel choice are theoretically ambiguous. It can reduce the household labor available for firewood collection and provide cash to purchase substitutes; however, it has an income effect that changes the demand for home-cooked food and energy to cook it. Firewood or gas could be used to meet the increase in energy demand. To resolve this theoretical ambiguity, we use an instrumental-variables method with household panel data from rural Mexico and investigate the impact of Mexico-to-US migration and remittances on gas expenditures and household labor allocated to firewood collection. Sending a migrant to the United States causes a significant decrease in reliance on firewood collection and an increase in both stove and gas purchases. These findings have potentially far-reaching environmental implications as labor moves off the farm.

Download the paper | Read more >>

The Continuing Immigration Debate and Germany: Managing Migration in the 21st Century

Martin, P.L. (Edited by Hollifield, J., P.L. Martin, and P. Orrenius.)

Migration is defined by the United Nations as the movement from one of the world's 200+ nation states to another for 12 months or more, regardless of the purpose for being outside the country or birth or citizenship or legal status in the new country. According to thise fairly inclusive definition, there were 175 million migrants in 200, which means that 3 percent of the world's residents are outside their country of birth or citizenship as immigrants, foreign students and workers, or unauthorized residents.

Download the paper | Read more >>

Immigration and Farm Labor: Policy Options and Consequences

Martin, Philip L.

US farms employ 2.4 million hired workers sometime during a typical year, over half of whom are unauthorized. Hired farm labor is concentrated by commodity, geography, and size of farm. While all producers face risks due to immigration enforcement, large producers of labor-intensive crops in California, Florida, Texas, and Washington are most vulnerable to increased labor costs. The four major immigration policy options would increase enforcement against illegal migration. The status quo of more I-9 audits and state and local laws encourages risk avoidance, including farmers turning to labor contractors and other intermediaries to obtain workers so that liability for violations rests with these middlemen. An enforcement-only approach that requires all employers to use EVerify to check new hires may result in the circulation of unauthorized workers between employers. Stepped-up enforcement combined with easier access to guest workers should increase the share of farm jobs filled by legal foreign workers from less than 10 percent today. Finally, comprehensive immigration reforms that include more enforcement and legalization could accelerate the exodus of current workers from the farm work force and may increase the employment of guest workers.

Download the paper | Read more >>

The End of Farm Labor Abundance

Taylor, J. Edward, Diane Charlton, and Antonio Yúnez-Naude

An analysis of nationally representative panel data from rural Mexico, with observations in years 2002, 2007, and 2010, suggests that the same shift out of farm work that characterized U.S. labor history is well underway in Mexico. Meanwhile, the demand for agricultural labor in Mexico is rising. In the future, U.S. agriculture will compete with Mexican farms for a dwindling supply of farm labor. Since U.S. domestic workers are unwilling to do farm work and the United States can feasibly import farm workers from only a few countries in close geographic proximity, the agricultural industry will eventually need to adjust production to use less labor. The decline in foreign labor supply to farms in the United States ultimately will need to be accompanied by farm labor conservation, switching to less labor intensive crops and technologies, and labor management practices that match fewer workers with more farm jobs.

Download the paper | Read more >>

Reducing Migration Costs and Maximizing Human Development

Martin, Philip L.

This chapter was prepared for discussion at the Roundtable Session 2.1 on “Reducing the costs of migration and maximizing human development,” at the Global Forum on Migration and Development held in Athens, Greece, on November 4–5, 2009. It elaborates on the job-matching recruiters, recruitment costs, the four-stage recruitment process, and recruitment regulationas and realities in Bangladesh, India, Nepal, Philippines, and Sri Lanka.

Download the chapter | Read more >>

High-Skilled Migrants: S&E Workers in the United States

Martin, Philip L.

Universities and employers want easier access to foreign science and engineering (S&E) students and workers. Most U.S. residents with degrees in S&E fields are U.S.-born citizens, and there are far more U.S. citizens with S&E degrees, about 15 million, than are employed in S&E occupations, about 5 million. Foreign students and workers in S&E occupations are concentrated in computer-related jobs, and their presence raises trade-offs for U.S. students and workers. For example, making it easier for U.S. employers to hire foreign S&E workers allows employers to specify precisely the qualities desired to fill a particular job quickly while limiting options for U.S. workers who could fill that job with some retraining. This article reviews the trade-offs between the competing goods raised by foreign S&E students and workers and the efforts of U.S. government agencies to reconcile them.

Download the paper | Read more >>