Job Displacement from Agriculture

Abstract

AbstractUnlike manufacturing employers, “small” agricultural employers are generally not required to participate in the Unemployment Insurance system, which leaves many farm workers ineligible for unemployment benefits. Theory implies that displaced workers who are ineligible for benefits experience shorter jobless spells and a lower reemployment wage. With data from the Displaced Workers’ Survey, we show that displaced agricultural workers spend 4.6 fewer weeks unemployed and upon reemployment earn 9% less than displaced manufacturing workers. Not surprisingly, in states where “small” agricultural employers are required to participate in the Unemployment Insurance program, postdisplacement outcomes for agricultural and manufacturing workers are similar.