Farm Labor Supply Research Articles

Pandemic‐induced De‐urbanization in Indonesia: Urban and Rural Impacts

In Indonesia, the negative health impact of COVID‐19 and the initial, direct loss of employment have been largest in urban, not rural areas. But the second‐round effects on labor markets have been very different. They have included a huge, empirically documented migration of newly unemployed urban workers from urban to rural areas, in urgent search of employment, food, and safety from the pandemic. We call this “de‐urbanization.” It placed the migrating workers in economic competition with the least skilled agricultural workers, expanding their numbers by almost 8%. By increasing the supply of unskilled farm labor, de‐urbanization depressed farm workers' real wages. Because the demand for farm labor is inelastic, the total wage income of these workers, aggregated across all unskilled farm laborers, declined. The households relying on this source of income are by far Indonesia's poorest. Similar outcomes may occur in other pandemic‐affected developing countries with large agricultural sectors.

Low-Skilled Migrant Labor Schemes in Japan’s Agriculture: Voices From the Field

Abstract Despite rapid demographic decline, until recently, low-skilled migrant workers have been welcomed only through ‘side-doors’ such as technical interns (TITP). Yet pressure for change comes from two sides: the moral critique of the ‘side-door’ scheme, and the growing economic pressures of a dwindling labor force. In 2018 Japan put in place a short-term bona-fide labor scheme (Specified Skilled Worker; hereafter, SSW) in fields previously largely inaccessible to foreign labor. In combination with the TITP schemes, these workers are allowed to stay longer. But what do these changes mean, how do the farmer-employers see them, and will the SSW lead to a sustainable farm labor supply going forward? We explore stakeholders’ views of the current schemes and their opinions on how low-skilled labor migration should proceed in agriculture. Businesses are desperate for labor, but not at any cost. Under SSW, employers are being asked to change the ways they envision and treat migrant labor. The tensions between their expectations and the realities on the ground reflect the contradictions that Japan’s migration policies inherit, based in the bureaucratic fiction that only ‘skilled’ labor is necessary. Data for this paper come from qualitative interviews conducted from 2018 to 2022 in Kyoto, Aichi, and Tokyo.

Analysis of Farm Labour Supply among Cucumber Farmers in Ikot Ekpene Agricultural Zone, Akwa Ibom State, Nigeria

The study analyzed farm labour supply among 90 cucumber farmers that were randomly selected using a multistage sampling in Ikot Ekpene Agricultural Zone, AKS, Nigeria. Specifically, the study sought to examine the socioeconomic characteristics of cucumber farmers in the study area; examine the amount of labour utilized for different cucumber production operation; estimate the determinants of cucumber productivity and examine constraints to cucumber production in the study area. Structured questionnaire was used to collect data which were analyzed using means, frequencies, standard deviation, multiple regression analysis and the Likert Scale Rating technique. Result revealed a mean farming experience, age, household size and farm size of 5 years, 4 years, 5 persons and 0.5 hectare and 5 persons respectively. Majority (62.21) of respondent were female, married (71.1%), educated (87.3%), and participation in off farm activities (83.3%). Findings showed that while men participated more in land clearing (81.1%) and land preparation (76.6%) women were actively involved in weeding (79.2%) and harvesting (45.1%). Children on their part participated more on planting (44%) and fertilizer application/pesticide (47.4%), respectively. Results further showed that the major determinants of labour were farm size (p>.0.01), household size (p>0.05), education (p>0.05), farming experience (p>0.01) and quality of manure/fertilizer (p>0.01). Also, the major constraints to cucumber production were scarcity of seed and agro chemicals, lack of storage facilities, high perishability of product, pest and disease infestation, low prices of product, high cost of labour, poor labour supply, poor access to credit, thefts of product, and low yield, respectively. It is recommended that prices of input should be subsidized, extension agents should be deployed to the area and that effort should be made to discharge the high off farm participation among cucumber farmers in the study area.

Socio-economic Determinants of Adoption of Maize Production Technologies among Smallholders

Agricultural technology adoption is germane for improved farm efficiency and productivity. Thus, the socioeconomic determinants of adoption of maize production technologies among smallholders were analyzed. Primary data collected via multi-stage sampling from 101 respondents was empirically evaluated using descriptive statistics and Logit regression. The respondent’s socioeconomic factors affected maize production technology adoption. Several maize production technologies were available in the study area; however adoption of these technologies among respondents was relatively low. The coefficient of multiple determination (R2) was 0.74827. The regression coefficients of household size (0.541), education (0.331), farm experience (0.615), farm size (0.448) and extension contact (0.457) were statistically significant at p0.05 probability level. Furthermore, the constraints identified by respondents also affected the adoption of maize production technologies in the study area. This study recommends subsidizing technology cost, improved cooperative activities; access to technology, credit and extension services, farm labour supply and tenure policy modifications.

Farm labor supply and fruit and vegetable production

AbstractThis study provides econometric estimates of the effects of reductions in farm labor supply on the production of hand‐harvested fruits and vegetables. Using crop production and employment data from California counties, we estimate panel regressions linking farm employment to crop production outcomes. Because we exploit variation in equilibrium employment, as opposed to exogenous variation in the labor supply curve, we use an equilibrium displacement model to identify the most likely sources of estimation bias and conclude that our regression estimates should be interpreted as upper bounds for the effect of interest. Our results indicate that a 10% decrease in the farm labor supply (in terms of the number of workers) causes at most a 4.2% reduction in production in the top 10 fruit and vegetable producing counties. Production effects are channeled primarily through a reduction in harvested acreage, although we also uncover some effects on yield.

Natural circumstances and farm labor supply adjustment: the response of the farm labor supply to permanent and transitory natural events

Natural circumstances and farm labor supply adjustment: the response of the farm labor supply to permanent and transitory natural events

Housing booms and H‐2A agricultural guest worker employment

AbstractThis paper examines the effects of changes in housing demand on H‐2A employment within commuting zones from 2001 to 2017. Agricultural employers who demonstrate that no workers in the domestic labor market are willing or able to perform a seasonal or temporary farm job can apply for certification to hire guest workers through the H‐2A visa program. H‐2A employment grew more than 450% between 2001 and 2019 from 45,000 to 258,000. This is one of the first papers to econometrically examine causal factors that contributed to the growth of H‐2A employment. We find that a 1% increase in housing demand leads to a 0.40%–0.97% increase in H‐2A employment. We also show suggestive evidence that changes in housing demand affect H‐2A employment through shifts in the demand for workers in nonfarm industries that pull workers from the agricultural sector. Consistent with previous literature, we show that positive housing demand shocks lead to increased employment in construction and other nontradable sectors that traditionally hire immigrant workers. We also find positive effects of housing demand on local farm wages, consistent with an inward shift in the local farm labor supply during housing booms.

Effects of Demographic Factors on Population Dynamics in Imo State, Nigeria; Implications for Farm Labor Availability and Supply

The study assessed the effects of demographic factors on population dynamics in Imo State, Nigeria. Multi-stage sampling technique was used select 60 respondents. Data collected were analyzed using descriptive statistics and the ordinary least square regression technique. Results showed that the area was dominated by female farmers 56.7%, and are married 66.7%. Most of the farming lands used was inherited, with more of hired laborers 76.7% used due to rural-urban drift. Results also showed that over 70% of the people migrated from rural to urban communities. Result further showed that age, gender, educational status, income level and poverty index were important and significant factors affecting population dynamics (expressed as index of rural–urban migration). The study recommended the crop farmers to join cooperative societies to raise funds to support large-scale production while the government is to provide basic rural infrastructures to checkmate rural-urban drift in the area.

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

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].

Stringent immigration enforcement and responses of the immigrant‐intensive sector: Evidence from E‐Verify adoption in Arizona

AbstractThis article examines the impact of the 2008 Legal Arizona Workers Act on farm wage, production mix, farm capital use, and agricultural innovation using the synthetic control method. The findings indicate that the law significantly reduced farm worker population in Arizona. Farm wage is not affected by the decreased supply of farm labor because farms in Arizona reduced labor‐intensive crop production. The agricultural sector does not increase the use of farm capital and experiences a decrease in profits. Moreover, this study finds no impact on agricultural patents and research funding in Arizona.

Technical Efficiency of Sweet Potato Production: A Stochastic Frontier Analysis

The level of yield among sweet potato farmers is on a decline; low output and yield differences was observed, indicating the existence of inefficiency in production systems and variations in input utilization. Efficiency in resource use must be sustained in order to improve productivity and maximize farm output. This study therefore analyzed the technical efficiency of sweet potato production. Multi-stage sampling techniques were adopted in selecting 94 respondents for this study. Data collected was analyzed using descriptive statistics and stochastic frontier production function. The socioeconomic variables of the respondents affected their farm efficiency and level of farm output. The estimated ratio of the L/R test was 0.579; indicating a goodness of fit of the frontier model and thus a rejection of the null hypothesis. The coefficients of sweet potato seeds (vines) (0.362) and labour (0.439) were positive and statistically significant at 5% level of probability, while the coefficients of farm size (-1.333), fertilizer (-0.452) and herbicides (-0.766) were negative but statistically significant at 5% level of probability. The inefficiency model revealed that the coefficient of farm capital (-0.172), education (-2.281), access to credit (-0.472), farming experience (-0.639), extension contact (-0.733) and membership of cooperatives (-0.396) were negative and statistically significant at 5% level of probability. The mean technical efficiency was 0.62 (62%) implying that the sweet potato farmers in the study area were not producing at optimal capacity. The constraints identified significantly affected sweet potato production in the study area. Subsidizing input costs; sensitizing farmers on appropriate farming practices, cooperative formation and efficiency in resource utilization; improving access to agricultural inputs, technology, farm capital, credit and extension services, market linkages, farm labour supply and the development of indigenous technologies in sweet potato production are strongly recommended.

Does violent conflict affect the labor supply of farm households? The Nigerian experience

AbstractNigeria has experienced bouts of violent conflict in different regions since its independence leading to significant loss of life. In this article, we explore the average effect of exposure to violent conflict generally on labor supply in agriculture. Using a nationally representative panel dataset for Nigeria from 2010 to 2015, in combination with armed conflict data, we estimate the average effect of exposure to violent conflict on a household's farm labor supply. Our findings suggest that on average, exposure to violent conflict significantly reduces total family labor supply hours in agriculture. We also find that the decline in family labor supply is driven by a significant decline in the household head's total number of hours on the farm.

Agricultural Labor Supply

The labor supply response to agricultural wages is critical to the viability of crop production in high-income countries, which hire a largely foreign farm work force, as well as in low-income countries, where domestic workers move off the farm as the agricultural transformation unfolds. Modeling agricultural labor supply is more challenging than modeling the supply of other agricultural inputs or of labor to other sectors of the economy owing to unique features of agricultural production and farm labor markets. Data and econometric challenges abound, and estimates of agricultural labor supply elasticities are sparse. This review explains the importance and challenges of modeling farm labor supply and describes researchers’ efforts to address these challenges. It summarizes estimates of agricultural labor supply elasticities over the last 80 years, provides insights into variation in these estimates, identifies priority areas for future research, and reviews the most influential empirical work related to this important topic.

Does Violent Conflict Affect Labor Supply of Farm Households? The Nigerian Experience

Nigeria has experienced bouts of violent conflict in different regions since its independence leading to significant loss of life. In this paper, we explore the average effect of exposure to violent conflict generally on labor supply in agriculture. Using a nationally representative panel dataset for Nigeria from 2010-2015, in combination with armed conflict data, we estimate the average effect of exposure to violent conflict on a household's farm labor supply. Our findings suggest that on average, exposure to violent conflict significantly reduces total family labor supply hours in agriculture. We also find that the decline in family labor supply is driven by a significant decline in the household head's total number of hours on the farm.

Public Health Insurance and Farm Labor Supply: Evidence from China's Rural Health Insurance Reform

AbstractThis study examines the impact of China's public health insurance program on the farm employment decisions of the rural population. Using a difference‐in‐differences (DID) model, this study indicates that the public health insurance reform led to reallocation of the rural labor force out of the farm sector by reducing the farm employment and increasing the likelihood of rural residents working in both the farm and nonfarm sectors. This research finds that rural female residents who are of a younger age and in better health were more likely to leave farm employment when covered by public health insurance. Suggestive evidence also finds that such public health insurance reform increased the individual income of the farm population.

Potential Impacts of a Pandemic on the US Farm Labor Market.

An outbreak of COVID‐19 among farmworkers could have significant impacts on the workers, agricultural producers, and the consumers. Farmers are implementing new labor management practices to slow the spread of the virus among workers. Since immigration is temporarily restricted, farmers may have difficulty securing a sufficient workforce. We test whether changes in the unemployment rate affected H‐2A guest worker demand before the pandemic and find a statistically significant negative impact. Nevertheless, we expect that H‐2A recruitment will be vital to sustaining agricultural production. We conclude by discussing potential long‐term impacts of the pandemic on farm labor supply and demand.

The Effect of China's Health Insurance on the Labor Supply of Middle-aged and Elderly Farmers.

Social security primarily improves residents’ welfare and ensures labor market sustainability. This study presents a new view of the association between health insurance and labor supply by using data from the China Health and Retirement Longitudinal Study. The results reveal that the health insurance system has a remarkable effect on labor supply. The health insurance coverage tends to encourage middle-aged and elderly farmers to increase their farm labor participation rate and working time, especially for their household agricultural labor participation rate and working time. However, it also reduces the non-farm labor participation rate and working time. Different types of health insurance have diverse effects on labor supply. The new cooperative medical insurance has a stronger pull-back effect. It encourages the middle-aged and elderly farmers to leave the urban non-farm sector and transfer to rural areas to engage in their household agricultural work. The urban employee medical insurance encourages farmers to reduce self-employed labor supply and increase employed work. The supplemental health insurance tends to reduce the labor supply of farm employed and non-farm labor supply, but improve the farm labor supply. Furthermore, urban resident medical insurance and government medical insurance encourage farmers to quit directly from the labor market. In conclusion, the health insurance system is facilitating change in the labor market. Policy-makers should pay full attention to such impacts while improving the health insurance system’s design and operation in China.

The US Market for Agricultural Labor: Evidence from the National Agricultural Workers Survey

AbstractRecent changes in agricultural labor supply have created renewed interest in the market for farm labor. This study estimates the supply of farm labor using 1989–2016 data from the National Agricultural Workers Survey. In the preferred specification a $1 rise in wage is associated with workers supplying 0.538 more hours, all else held constant. This estimate masks changes in this relationship over time, however, as workers responded positively to wages before 2001, and reversed this relationship after 2001. Other results highlight the role of illegality, education, experience, gender, and other characteristics with respect to labor supply.

Income Targeting and Farm Labor Supply

There is considerable anecdotal evidence that farm workers who are paid by piece rate tend to “income target,” or work only until they achieve a certain amount of daily income, and then stop work. We estimate reduced‐form and structural models derived from the reference‐dependent preference model of Koszegi and Rabin (2006) to test the income‐targeting hypothesis using data from the National Agricultural Workers Survey (NAWS). We find evidence that supports the income‐targeting hypothesis, in both the reduced‐form and structural econometric models. Our findings suggest that even higher piece rates may not help the widely reported shortage of agricultural labor on the intensive margin as labor‐supply curves can be backward bending.

Land consolidation as technical change: Economic impacts in rural Vietnam

Abstract This paper deepens the economic analysis of the effects of land consolidation – reduction of land fragmentation. It does this in the context of rural Vietnam, studying whether land consolidation promotes or hinders the Vietnamese government’s policy objectives of encouraging agricultural mechanization and stimulating the off-farm rural economy. The analysis views land consolidation as a form of technical change, making it possible to apply the rich insights developed in the economic literature on that subject. This treatment reveals that the economic impacts of land consolidation depend partly on its factor bias and partly on the degree to which labor is substitutable in production for other factors. At a theoretical level, if a technical change is factor neutral, it will reduce off-farm labor supply and slow rural structural transformation away from agriculture; if it is labor-augmenting and the elasticity of substitution between factors is low enough, the opposite effects are predicted. The paper studies these issues empirically for rice production in Vietnam, focusing on the impact that consolidation of rice land has on rice production, machinery use, and labor allocation. The findings confirm that land consolidation raises both farm productivity and farm income and stimulates increased machinery use. It also reduces farm labor supply, lowers labor intensity in farming, and thereby releases more farm labor to off-farm development, consistent with government policy objectives. Based on these findings, the paper concludes that land consolidation should be encouraged through development of land ownership rights and the promotion of land rental markets.