Nonfarm Work and Income Smoothing Among Domestic Farmworkers

Historically, farmers in the United States (US) have relied on a highly elastic supply of low-wage labor from rural Mexico. However, recent studies show that the supply of farmworkers from rural Mexico has been decreasing. In this study, we use data from the National Agricultural Workers Survey to identify factors that are linked to farmworkers’ likelihood of shifting to nonfarm work and whether non-farm employment is serving as an income smoothing strategy for seasonal farmworkers. We find evidence of a recent upward pre-COVID trend in farmworkers’ probability of working in nonfarm occupations and that this trend has reversed since the pandemic. Farm- workers who are male and have more extensive off-farm networks, higher educational attainment, legal documentation, or are migrants tend to have a higher probability of recently working in a nonfarm occupation. We also find that nonfarm work is linked to higher annual earnings, suggesting that farmworkers who diversify their employment between farm and nonfarm employment are able to use nonfarm employment as an income smoothing strategy.