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Do Farm Workers Earn Less? An Analysis of the Farm Labor Problem

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  • Micha Gisser
  • Alberto Dávila

Abstract

During the four decades extending from 1950 to 1960, the ratio of the farm to nonfarm wage fluctuated between 0.45 and 0.55. We employ the Oaxaca technique and the Public Use Microdata Sample of the 1990 Census to decompose the farm/nonfarm wage differential. We also use the American Chamber of Commerce Research Association (ACCRA) cost-of-living data to measure the impact of the farm/nonfarm cost-of-living index on the wage gap. First, we find that the observed wage gap is reduced by half when nominal wages are deflated by the (ACCRA) cost-of-living index. Second, by applying the Oaxaca method separately to a subsample of young employees and a subsample of old employees we find that while for the subsample of employees younger than thirty-five years the real wage gap practically vanishes, the gap for the subsample of employees who are thirty-five years of age and over is higher than that of the total sample. This finding lends strong support to the hypothesis that between 1950 and 1970 the process of farm out-migration was positively selective. Copyright 1998, Oxford University Press.

Suggested Citation

  • Micha Gisser & Alberto Dávila, 1998. "Do Farm Workers Earn Less? An Analysis of the Farm Labor Problem," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 669-682.
    • Handle: RePEc:oup:ajagec:v:80:y:1998:i:4:p:669-682
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    Cited by:

    1. Koester, Ulrich & von Cramon-Taubadel, Stephan, 2019. "Besonderheiten der landwirtschaftlichen Arbeitsmärkte," IAMO Discussion Papers 184, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    2. Michael J. Pisani & José A. Pagán, 2004. "Sectoral Selection and Informality: a Nicaraguan Case Study," Review of Development Economics, Wiley Blackwell, vol. 8(4), pages 541-556, November.
    3. Tzu-Ling Huang & Peter F. Orazem & Darin Wohlgemuth, 2002. "Rural Population Growth, 1950–1990: The Roles of Human Capital, Industry Structure, and Government Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 615-627.
    4. repec:zbw:iamodp:285193 is not listed on IDEAS
    5. Talan B. Işcan, 2012. "Allocative Inefficiency and Sectoral Allocation of Labor: Evidence From US Structural Transformation," Working Papers daleconwp2012-02, Dalhousie University, Department of Economics.
    6. Simeone, Mariarosaria, 2005. "The Generational Turnover in Agriculture: Theoretical Problems and Empirical Evidences," 94th Seminar, April 9-10, 2005, Ashford, UK 24434, European Association of Agricultural Economists.
    7. Davila, Alberto & Pagan, Jose A. & Soydemir, Gokce, 2002. "The short-term and long-term deterrence effects of INS border and interior enforcement on undocumented immigration," Journal of Economic Behavior & Organization, Elsevier, vol. 49(4), pages 459-472, December.
    8. Napasintuwong, Orachos & Emerson, Robert D., 2002. "Induced Innovations And Foreign Workers In U.S. Agriculture," 2002 Annual meeting, July 28-31, Long Beach, CA 19738, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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