NAWS Research. Jeff Perloff

Transcription

1 NAWS Research Jeff Perloff

2 The Advantage of the NAWS Dataset In contrast to previously available datasets, the NAWS covers much of the seasonal agricultural parts of the country uses random sampling covers thousands of workers finds workers on agricultural jobs rather than by housing surveys several times during the year provides repeated cross sections for many years These differences allow us to examine questions that we could not previously explore well if at all.

3 Some Topics We Can Study Using the NAWS Wage, benefits, and hours Migration Retention and duration of employment Effects of laws and welfare Market conditions (recessions) Other Likelihood of automating Crime? Drought?

4 Wages, Benefits, and Hours

5 Effect of Legal Status on Earnings Immediately after IRCA (1986), documented agricultural workers earned 15% more than undocumented workers on average. The earnings differentials reflects both wage and hours differentials. Three-quarters of the weekly earnings differential between amnesty and green-card workers to that of unauthorized workers is due to wage differentials. The differentials also vary by demographic and other characteristics. Language ability offsets much of the weekly earnings loss from not have legal status, in part by being able to work more hours than those without language skills. Sabrina Isé and Jeffrey M. Perloff, Legal Status and Earnings of Agricultural Workers, American Journal of Agricultural Economics, 77(2), May 1995:

6 Piece Rate vs Hourly Rate Employment Earnings effect: Greatest for prime age workers (rises and then falls). Nonpecuniary effects: The probability of piece work falls and then rises with age. Older workers may not be able to find higher-paying time rate jobs, or enjoy working with family group The net effect is that the probability of piece work rises with age. A substantial share of prime-age workers do not choose to work in the more lucrative piece-rate jobs. Indeed, all else the same, they are the least likely among all age groups to work in piece rate. Legal status does not have a significant effect on the piece-time decision. D. Kate Rubin and Jeffrey M. Perloff, Who Works for Piece Rates and Why, American Journal of Agricultural Economics, 75(4) November 1993: Amos Golan, Enrico Moretti, and Jeffrey M. Perloff, An Information-Based Sample-Selection Estimation Model of Agricultural Workers' Choice Between Piece-Rate and Hourly Work, American Journal of Agricultural Economics, 81(3), August 1999:

7 Probability TotaI Effect of Age Earnings Effect 0.2 o B /}(Je

8 Migration

9 Reasons Why Workers Migrate Workers migrate (at least 75 miles) primarily to receive higher wages rather than more hours of work. A 10% earnings differential raised the probability of migrating by slightly more than 1%. Thus, there must be substantial costs to migrating. Undocumented workers were more likely to migrate than documented workers. In the past, they did not fear a greater probability of being apprehended if they migrated. Stricter ICE enforcement may have contributed to reduced migration rate, which explains why farmers are calling for guest worker programs or considering automation. Jeffrey M. Perloff, Lori Lynch, Susan M. Gabbard, Migration of Seasonal Agricultural Workers, American Journal of Agricultural Economics, 80(1), February 1998:

10 Drop in Migration Rates The share of ag workers who migrate fell by about 60% since the late 1990 s Migration Rates (%)

11 90 Migration Rates by Legal Status (%)

12 Why the Drop in Rates? Over the last decade, the fall in the migration rate was due to two-thirds: structural changes (conditions in Mexico, laws, enforcement, ) one-third: changes in the demographic composition of the work force (older, more females, legal status, ); In some recent years, demographic changes were responsible for half the drop. Demographics: Since 1999, undocumented workers are 55% of U.S. migrant workers, but only 40% of non-migrants. Females are 15% of migrants, but 27% of non-migrants. Maoyong Fan, Susan Gabbard, Anita Alves Pena, and Jeffrey M. Perloff, Why Do Fewer Agricultural Workers Migrate Now? American Journal of Agricultural Economics, 97(3), April 2015:

13 Retention and Duration of Employment

14 Duration of Agricultural Employment The NAWS provides retrospective employment histories. Whether a worker has a long-term job and the duration of shorter term jobs depends on some worker characteristics. The duration of farm employment for male documented workers is double that of comparable undocumented workers. Age, experience, and skill level matter, but most other characteristics including English skills have little effect. Emiko Hashida and Jeffrey M. Perloff, Duration of Agricultural Employment, Department of Agricultural and Resource Economics, University of California, Working Paper No. 779, 1996.

15 Worker Retention Whether workers return next season depends on decisions by both employers and workers. Employers are more likely to rehire prime age, experienced, foreign-born workers. Employees are more likely to return if employers offer benefits, pay by the hour, provide good working conditions, and hire directly (not using FLCs). An employer increases the probability that a worker returns by spending the last $1 of compensation on benefits or better working conditions than on higher wages. Susan M. Gabbard and Jeffrey M. Perloff, The Effects of Wages, Benefits, and Working Conditions on Farm Worker Retention, Industrial Relations, 36(4), October 1997:

16 Turnover Workers move in and out of agriculture frequently. Migration between jobs takes little time. Female workers stay out of the U.S. labor market longer once they stop working in agriculture. Legal status matter, but IRCA had less of an effect on the agricultural labor market than was anticipated. Lien H. Tran and Jeffrey M. Perloff, Turnover in U.S. Agricultural Labor Markets, American Journal of Agricultural Economics, 84(2), May 2002:

17 Amnesty Undocumented Share Share 0,8 a.a Ag riculture 0,6 o.e Agrlculture Not Werking Not Working 0,2 0,2 Nonagrlculture Nonegriculture D Months Months

18 Efficiency Wages & Deferred Payments Efficiency Wage: an unusually high wage Higher wages or deferred payments (benefits) that direct-hire growers pay relative to that of farm labor contractors is an efficiency wage Growers use this extra compensation to lower monitoring expenses and reduce shirking by workers. Workers due not shirk to avoid being fired before wage rises. Consistent with efficiency wage theory: wages and benefits rise with tenure (deferred payments) Enrico Moretti and Jeffrey M. Perloff, Efficiency Wages and Deferred Payments in Agriculture, American Journal of Agricultural Economics, 84(4), November 2002:

19 Frequency( %) Wage($) :.~ _.Al::::: , Piece Rate, FLC.,,;,.,,.r,,...,....,.....,...~ "~ Piece Rate Farmer o L------~~~~~~~~~~ Tenure (yea rs) Tenure (years)

20 Laws and Welfare

21 Minimum Wage An increase in the federal minimum wage causes some nonagricultural workers to move to agriculture. A $1 increase in the state minimum wage causes the average wage to rise by 12 in the hourly sector but does not affect the piece-rate sector. federal minimum wage causes the average wage to rise by 14 in the hourly sector and drop by 26 in the piece-rate sector. Probability of being paid less than the federal minimum wage In the years studied, ranged from 4% to 13% Controlling for individual characteristics, a $1 increase in the federal minimum wage raise the probability of being paid less than the minimum wage by 16.7%, which does not vary by legal status. Enrico Moretti and Jeffrey M. Perloff, Minimum Wage Laws Lower Some Agricultural Wages, Department of Agricultural and Resource Economics, University of California, Working Paper, April 1999.

22 Welfare and Medical Assistance Compared to families of documented immigrants and citizens, families of undocumented immigrants are substantially less likely to use public welfare and social insurance programs, more likely to use public medical assistance. We don t find trends. Almost no one relies on private aid. Undocumented immigrants with young children in theunited Statesare slightly morelikely to use welfare, and welfare recipients are slightly more likely to have young children here. Enrico Moretti and Jeffrey M. Perloff, Use of Public Transfer Programs and Private Aid by Farm Workers, Industrial Relations, 39(1), January 2000:26-47.

23 Market Conditions

24 Recessions Hypothesis: Farm labor supply curve shifts left during recessions (fewer undocumented workers), while demand curve stays relatively constant. Thus, recessions raise farmers labor costs and increase their risk. Wages and benefits rise for all worker. Wages and benefits rise more for documented workers than for undocumented workers. Weekly hours rose much more for undocumented workers during the Great Recession. Bonus pay and weekly hours also increased for some workers, suggesting general increases in the financial wellbeing of employed agricultural workers during recessions. In contrast, in other low-skilled labor markets (construction, hotels, restaurants), wages are constant and hours fall. Maoyong Fan, Anita Alves Pena, and Jeffrey M. Perloff, Effects of the Great Recession on the U.S. Agricultural Labor Market, American Journal of Agricultural Economics, 98(4), July 2016: