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Assessing The Impact Of Conservation Policies On Rural Communities: The Role Of Labor Markets

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  • Ray, Srabashi
  • Hertel, Thomas

Abstract

Labor is a critical, but often overlooked, input in agriculture. In this paper we develop a theoretical model to demonstrate how agricultural labor market functioning plays a significant role in determining the impact and distributional consequences of conservation policies. We next propose a novel approach to use the theoretical model to explain the impacts of a groundwater conservation policy from a spatially explicit quantitative model comprising 75,000+ grids within the US. Building on existing literature of gridded agricultural production (Baldos et al. 2020) and local labor markets using Commuting Zones (Fowler, Rhubart, and Jensen 2016b) we develop the SIMPLE-G-CZ model of agricultural production and labor markets. We find that labor market rigidities dampen the effectiveness of conservation policies. Limited labor mobility also results in the conservation policy’s incidence being borne in greater proportion by farm workers, with these impacts varying widely across local labor markets.

Suggested Citation

  • Ray, Srabashi & Hertel, Thomas, 2022. "Assessing The Impact Of Conservation Policies On Rural Communities: The Role Of Labor Markets," Conference papers 333401, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333401
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