Immigration Reform and Farm Labor Markets

Abstract Farmers throughout the United States report a shortage of workers. At the same time, there are proposals to strengthen the enforcement of existing immigration laws. In this paper, we develop an equilibrium approach to examine the impact of removing undocumented workers from the California agricultural labor market, and to infer whether there is evidence of shortages using individual‐worker data. We find evidence that is consistent with a persistent shortage in some sub‐sectors of the California farm labor market. Further, we conduct counter‐factual policy simulations over a range of possible policy alternatives, and find that removing 50% all undocumented farm workers from the state would lead to an increase in wages of over 22%.