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Hysteresis and the Shortage of Agricultural Labor

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  • Timothy J. Richards
  • Paul M. Patterson

Abstract

Fruit and vegetable growers often allege a shortage of agricultural workers, but in a review of the H2A nonimmigrant guestworker program the General Accounting Office claims that no such shortage exists. The apparent shortage may be due to workers that are in the labor force but do not choose to take agricultural jobs. According to real options theory, when nonagricultural jobs are uncertain, workers require added incentive to invest in sectoral migration. Estimates of an arbitrage model in monthly Washington state wage data show the labor-shortage probability to be far greater than the probability of a surplus. Copyright 1998, Oxford University Press.

Suggested Citation

  • Timothy J. Richards & Paul M. Patterson, 1998. "Hysteresis and the Shortage of Agricultural Labor," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 683-695.
  • Handle: RePEc:oup:ajagec:v:80:y:1998:i:4:p:683-695
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    Cited by:

    1. Calum G. Turvey, 2010. "Biography: Kiyosi Itô and his influence on the study of agricultural finance and economics," Agricultural Finance Review, Emerald Group Publishing, vol. 70(1), pages 5-20, May.
    2. Musshoff, Oliver & Odening, Martin, 2005. "Switching from Conventional to Organic Farming – a Real Options Perspective," 89th Seminar, February 2-5, 2005, Parma, Italy 234633, European Association of Agricultural Economists.
    3. Tauer, Loren W., 2006. "When to Get In and Out of Dairy Farming: A Real Option Analysis," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(2), October.
    4. Karunagoda, Kamal, 2004. "Changes in Labour Market and Domestic Agriculture," Sri Lankan Journal of Agricultural Economics, Sri Lanka Agricultural Economics Association (SAEA), vol. 6.
    5. Wheatley, W. Parker & Liu, Donald J. & del Ninno, Carlo, 2001. "Empirical Analysis Of Hysteresis In Rural Labor Markets In A Developing Country: The Case Of Bangladesh," 2001 Annual meeting, August 5-8, Chicago, IL 20594, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Brady, Michael P. & Gallardo, R. Karina & Badruddozza, Syed & Jiang, Xiaojiao, 2016. "Regional Equilibrium Wage Rate for Hired Farm Workers in the Tree Fruit Industry," Western Economics Forum, Western Agricultural Economics Association, vol. 15(01).
    7. Feil, Jan-Henning & Musshoff, Oliver, 2013. "Investment, disinvestment and policy impact analysis in the dairy sector: a real options approach," Structural Change in Agriculture/Strukturwandel im Agrarsektor (SiAg) Working Papers 159229, Humboldt University Berlin, Department of Agricultural Economics.
    8. Feil, Jan-Henning & Mußhoff, Oliver, 2016. "Investment And Disinvestment Under Uncertainty, Firm Heterogeneity And Tradable Output Permits," 56th Annual Conference, Bonn, Germany, September 28-30, 2016 244756, German Association of Agricultural Economists (GEWISOLA).
    9. Feil, Jan-Henning & Musshoff, Oliver, 2012. "Policy Impact Analysis on Investments and Disinvestments under Competition: A Real Options Approach," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 124294, Australian Agricultural and Resource Economics Society.
    10. Martin Odening & Oliver Mußhoff & Alfons Balmann, 2005. "Investment decisions in hog finishing: an application of the real options approach," Agricultural Economics, International Association of Agricultural Economists, vol. 32(1), pages 47-60, January.
    11. Quoc V. Luong & Loren W. Tauer, 2006. "A real options analysis of coffee planting in Vietnam," Agricultural Economics, International Association of Agricultural Economists, vol. 35(1), pages 49-57, July.
    12. Feil, Jan-Henning & Mußhoff, Oliver, 2016. "Analysing investment and disinvestment decisions under uncertainty, firm heterogeneity and tradable output permits," DARE Discussion Papers 1602, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).

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