Author
Orazem, Peter F.
This study examines how livestock farm labor demand responds to local wages for native workers and the adverse effect wage rate paid to foreign workers with an H-2A visa. Livestock producers’ demand for domestic labor is elastic, but the demand for H-2A workers is more elastic. This implies that equiproportional increases in all wages will shift relative demand toward domestically sourced—but possibly undocumented—labor. Our analysis also shows that capital and labor are complementary inputs in livestock production, meaning that the use of hired labor increases as farms invest more in capital.
This study investigates worker shares of the returns to scale and returns to technology adoption on U.S. hog farms. The wage analysis controls for a matching process by which workers are linked to farms of different sizes and technology uses. Using four surveys of employees on hog farms collected in 1990, 1995, 2000, and 2005, we find persistent large wage premiums are paid to workers on larger farms and on technologically advanced farms that remain large and statistically significant even after controlling for differences in observable worker attributes and in the observed sorting process of workers across farms.
The shift of the U.S. meat packing industry from urban to rural areas has generated controversy regarding potential social and economic costs of meat packing plants on their host communities. This study uses media comments to identify the most prominent controversies regarding meat packing, its largely immigrant workforce, and rural communities. We find that the industry has impacted the demographic composition of rural communities and their schools, but find no evidence that the industry increases per capita government expenditures. Our results suggest rural communities trade off the economic benefits of hosting these large employers against the costs of accommodating needs of new residents.