On the political economy of guest worker programs in agriculture

Abstract

a b s t r a c tGuest workers have provided a source of agricultural labor supply in many countries. Recent legislative proposals on immigration reform in the United States have renewed discussions about the role of guest worker programs, and highlighted the arguments for and against such programs. Even within the agricultural sector, there has not been strong broad-based support for an expansion in the number of guest workers. A model is developed that considers competing interests between commodity groups (horticulture crops and grain crops) to explain this lack of support, and then a series of simulations are conducted to highlight the possible economic effects of an expanded guest worker program. Results suggest that an increase in the labor supply would have much larger economic impacts for horticultural producers and firms in the supporting input markets. Furthermore, under some conditions, simulation outcomes show how an increase in the labor supply may lead to small revenue losses for both producers and input suppliers in grain markets.