Hysteresis and the shortage of agricultural labor

T. J. Richards, P. M. Patterson

Research output: Contribution to journalArticle

17 Scopus citations

Abstract

Fruit and vegetable growers in the US often allege a shortage of agricultural workers, but in a review of the H2A nonimmigrant guestworker program the General Accounting Office claims that no such shortage exists. The apparent shortage may be due to workers that are in the labor force but do not choose to take agricultural jobs. According to real options theory, when nonagricultural jobs are uncertain, workers require added incentive to invest in sectoral migration. Estimates of an arbitrage model in monthly Washington state wage data show the labor-shortage probability to be far greater than the probability of a surplus.

Original languageEnglish (US)
Pages (from-to)683-695
Number of pages13
JournalAmerican Journal of Agricultural Economics
Volume80
Issue number4
DOIs
StatePublished - Nov 1998

Keywords

  • Arbitrage
  • Farm labor
  • Hysteresis
  • Option theory
  • Washington state

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

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