Willingness to Pay for Legal Visas: A Case Study of Agricultural Workers in Southern California

This paper presents a case study of a sample of Mexican agricultural workers in Southern California based on primary data collected by the authors from rural areas around Bakersfield. The ultimate aim of this study is to characterize and explore more deeply the complex array of variables that enter the migration decision of a typical worker in this region, and analyze the interrelationships between these variables. The administered survey was designed to accommodate questions that attempt to elicit responses about preferences in addition to those with easily quantifiable answers. This paper presents a descriptive summary of the survey results followed by the two main empirical questions and the results of the inquiry that constitute the main innovation of this work: i) to empirically estimate and analyze a "home premium": the non pecuniary benefit of being in Mexico and its possible determinants and ii) empirically estimate what factors affect the willingness to pay for annual legal visas among the undocumented workers in the region. The second question is an interesting and topical one because of the current debate about a possible temporary guest worker program. However, this paper does not take a policy perspective to the question but simply attempts to estimate the relative importance of different sources of the possible benefit of legalization to an undocumented worker. The data suggest that a significant home premium exists that is not significantly different between migrants of the two statuses, nor does it diminish with years spent in the U.S. The analysis of WTP suggests that the perceived benefit of legal status to a migrant comes mainly from a perception of higher wages in this status and through a perceived reduction in the average unemployment spell when first entering the U.S. by becoming legal.