Thursday, May 31, 2012
Immigration Report of the Day: Potential Impact of Changes in Immigration Policy on U.S. Agriculture and the Market for Hired Farm Labor: A Simulation Analysis by the U.S. Department of Agriculture
The Potential Impact of Changes in Immigration Policy on U.S. Agriculture and the Market for Hired Farm Labor: A Simulation, U.S. Department of Agriculture.
ABSTRACT: 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. Longrun 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.
Here are the conclusions:
The expanded employment of temporary nonimmigrant agricultural workers would lead to a longrun 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. By year 15 of the increased farm labor supply scenario, these four sectors experience a 1.1- to 2.0-percent increase in output and a 1.7- to 3.2-percent increase in exports, relative to the base forecast. Less labor-intensive sectors, such as grains, oilseeds, and livestock production, tend to have smaller increases, ranging from 0.1 to 1.5 percent for output and from 0.2 to 2.6 percent for exports.
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.
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. The lost income would be only partially offset by higher real wages for U.S.-born and foreign-born, permanent resident workers employed as hired farm laborers or in other lower paying occupations where unauthorized workers were formerly more prevalent. In the long run, overall gross national product accruing to the U.S.-born and to foreignborn, permanent residents would fall by about 1 percent, compared with the base forecast.