The effects of E‐Verify on the share of labor‐Intensive and capital‐Intensive crops: Evidence from farm‐level data

Abstract

AbstractImmigration enforcement policies, such as E‐Verify, have a negative effect on the US supply of farm labor. A growing literature finds that agricultural producers in the United States are facing a shrinking labor supply, while only a few studies examine how agricultural producers are adjusting to having less labor. This study examines how a shrinking labor force affects agricultural production decisions, specifically in terms of labor‐intensive and capital‐intensive crops. With less labor it is more challenging for agricultural producers to produce labor‐intensive crops when there is no available technology to substitute for labor. We use E‐Verify enforcement laws as a quasi‐natural negative labor shock and data from the Agricultural Resource Management Survey to examine this issue. We find a decline in the production of labor‐intensive crops and an increase in the production of capital‐intensive crops in the states that have enforced “strong” E‐Verify laws. Based on our results, the opposite is true for “weak” E‐Verify states. [EconLit Citations: Q12, Q18, J6, K37].