Source: PURDUE UNIVERSITY submitted to NRP
LABOR MARKETS AND THE IMPACTS OF ENVIRONMENTAL STRESSES AND CONSERVATION POLICIES ON US AGRICULTURE
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
ACTIVE
Funding Source
AFRI COMPETITIVE GRANT
Reporting Frequency
Annual
Accession No.
1028025
Grant No.
2022-67023-36403
Cumulative Award Amt.
$650,000.00
Proposal No.
2021-10836
Multistate No.
(N/A)
Project Start Date
Jan 1, 2022
Project End Date
Dec 31, 2026
Grant Year
2022
Program Code
[A1641]- Agriculture Economics and Rural Communities: Markets and Trade
Recipient Organization
PURDUE UNIVERSITY
(N/A)
WEST LAFAYETTE,IN 47907
Performing Department
Agricultural Economics
Non Technical Summary
Labor markets are critical to agriculture's response to environmental stresses. They are also an important source of exogenous shocks to the farm and food sector, including the COVID-19 pandemic and the slowing rate of migrant labor supply from rural Mexico to U.S. farms. Farm workers in the U.S. are becoming less mobile. Environmental stressors are compounding these labor market challenges. The overall goal of this project is to understand the linkage between the functioning of local agricultural labor markets and the response of agriculture to climate change, conservation policies and other shocks to the farm and food economy. To accomplish this objective, we will develop new labor market delineations for family, local and migrant labor and estimate the responsiveness of these different labor types to agricultural wages. We will embed these labor markets at high resolution within a multiscale model of agriculture, land and water resources, using this framework to shed light on the effects of labor heat stress and conservation policies on farm households, workers, and agricultural activity at the local, regional and national scales in the United States. This project will address key elements the Economics, Markets and Trade program, including assessment of changes in immigration, factors affecting farm labor shortages, and analysis of the relationships between agriculture, climate change, natural resource conservation, and the environment. Findings will be disseminated through a variety of channels with the goal of reaching as broad an audience as possible, and the framework will be disseminated to the broader research community.
Animal Health Component
80%
Research Effort Categories
Basic
20%
Applied
80%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6050210301050%
6036099301050%
Knowledge Area
605 - Natural Resource and Environmental Economics; 603 - Market Economics;

Subject Of Investigation
0210 - Water resources; 6099 - People and communities, general/other;

Field Of Science
3010 - Economics;
Goals / Objectives
The overall goal of this project is to understand the linkage between the functioning of local agricultural labor markets and the response of agriculture to environmental stressors, conservation policies and other shocks to the farm and food economy. To accomplish this objective, we will model labor markets at high resolution and embed these markets in a multiscale model of agriculture, land and water resources. We will use this framework to shed light on the effects of environmental stressors and policies on farm households, workers, and agricultural activity at the local, regional and national scales in the United States.
Project Methods
The first objective is to define labor market areas appropriate for the analysis of hired agricultural workers. The extent to which agricultural workers are able and willing to move between locations is an important determinant of a variety of outcomes at the local, regional and global levels, including input choices, crop mix, agricultural production and prices. However, little is understood about within-country migratory patterns of U.S. agricultural workers. Existing delineations of labor markets are created for a variety of purposes including the degree to which groups of counties are economically "connected" (i.e., wage similarities and simultaneous shifts in employment rates) or "contained" (i.e., workers live and work within these areas), using labor market information across all industries (Fowler and Jensen 2020). The groups of counties most "connected" or "contained" with regard to agricultural labor markets likely differ from those for other sectors. We aim to fill this gap and define the relevant 'labor sheds' for hired (local) and migrant U.S. agricultural workers.We plan to employ two methods to identify the relevant labor market delineations for these two types of workers. The proposed methods rely on data from the 5-year summary files of the American Community Survey (ACS) and the confidential data from the NAWS. Our approach consists of assessing the degrees of economic "connectedness" and "containment" for one extant delineations of labor market areas, USDA ERS "commuting zones," and two alternative delineations, USDA production regions and "agricultural labor sheds." The latter to be developed in this project based on the hierarchical cluster methods used to construct the USDA "commuting zones" and detailed in Fowler, Rhubart, and Jensen (2016). We detail this work in the methods section. The output from this objective will be delineation files of these agricultural labor sheds for local and migrant workers, including a county to agricultural labor shed crosswalk, shapefiles, and information on employment, wages, and expenditures on local hired and migrant hired labor within each labor shed.Our analytical framework will build on the SIMPLE-G-US model developed under prior AFRI grants (see ongoing and recently completed activities below). Figure 1 offers a schematic representation of the proposed framework, in which labor is employed in spatially distinct grid cells across the United States. Three different types of derived demand for agricultural labor (family, residential hired, and migrant hired) will be modeled as a function of labor demand factors including the climate, environment, technology, conservation policy, and crop growing season. Within each grid cell we impose the condition that labor demand and supply are in equilibrium for each labor type, with the geographic extent of the relevant labor markets depending on the type of labor, based on the findings from objective 1. Global labor supply factors influence the total global pool of workers (working age population) and the pool of U.S. migrant labor (relative earnings, immigration policy). Domestic supply factors influence labor supplies at different scales, e.g., the total supply of U.S. agricultural workers given migration (pandemics, ag wages, non-ag wages, and working conditions), the labor sheds that residents and migrants choose to relocate to (job prospects, cost of living, infrastructure, and wages), and the grid cells that they choose to work in (job prospects, ag wages, and working conditions). National crop demands will follow an Armington structure, with product differentiation by USDA farm resource regions. The international trade specification will follow prior work with the SIMPLE model (Hertel and Baldos 2016). The rest of the world is grouped into 16 regions, in which production and consumption follow the SIMPLE model specification. This will permit us to study responses outside the U.S., and hence international trade flows. International migration from Mexico and Central America will depend on labor market conditions in this region relative to the U.S., as well as U.S. immigration policy.With this quantitative framework in hand, we will conduct analysis of the interplay between labor markets and environmental shocks and policy interventions. Following the logic of equations (1) and (2), we will investigate spatially explicit shocks emerging from local environmental policies such as a groundwater sustainability policy and wetland restoration (Table 1), as well as from global environmental stresses such as labor capacity reductions due to heat stress as well as future pandemics. We will also examine the impacts resulting from a reduction in the supply of immigrant labor, due either to immigration policy or rising foreign wages. In addition, we will explore the impacts of local labor supply shocks due to changes in local economic conditions and policies (e.g., local housing costs or a minimum wage). The endogenous variables of interest in these analyses include agricultural employment within the labor shed, farm labor income, returns to land and water resources, regional income from crop production, food prices, and international agricultural trade.

Progress 01/01/24 to 12/31/24

Outputs
Target Audience:Policy makers, academics, farm organizations and non-governmental environment organizations. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Through bi-weekly project team meetings that consist of rotating presentations delivered by members of the project team, early-stage project team members have learned new modeling approaches, been introduced to new branches of literature, and have learned about effective grant management. For example, Co-PI Hill has continued to learn about the SIMPLE-G modeling framework through a series of presentations delivered by Co-PIs Ray and Haqiqi explaining the SIMPLE-G framework, including model parameters and assumptions, and demonstrating applications. This has led to additional collaborations that build on the groundwork laid by this grant. For example, due to interest among agricultural industry stakeholders, the team is now considering how the model can be used to model impacts of a multitude of possible changes to immigration policy in the US. Co-PI Hill has also used a variety of materials from this project in her outreach and extension materials and presentations as summarized below, which serve to educate and train agricultural industry stakeholders across the country. Co-PI Taylor presented related work at a major conference in Mexico City (see below). A SIMPLE-G Short Course was conducted in-person in Spring of 2024 at Purdue University. Materials developed in this project was used to provide training to two dozen researchers from the US, Latin America, Europe, Asia and Africa. The participants were introduced to the Local-Global-Local research framework. Co-PI Ray, conducted a session focused on labor markets to provide hands on training in using the labor module of the SIMPLE-G model. How have the results been disseminated to communities of interest?See conference presentations under products. Co-PI Hill has made numerous presentations to industry groups. Hill, Ray and Hertel have made numerous presentations to academic audiences. Taylor and Hertel have made presentations to policy makers and general interest audiences. What do you plan to do during the next reporting period to accomplish the goals?In 2025, we will use the newly developed SIMPLE-CZ-LABOR model to further the objectives of this project and develop the SIMPLE-G-LABOR model. Towards this goal, we will investigate the substitutability between different types of agricultural workers such as the substitutability of migrant and local workers, and between directly hired workers and contract hires. These parameters are important to better understand the impacts of scarcity in one type of farmworkers on others and the overall sector. Once developed, we will use it to analyze impacts of a diminished supply of migrant workers, challenges of heat and moisture stress on farmworkers and policy initiatives related to the H-2 immigrant worker program and labor-saving technologies. We plan to finalize our manuscript led by Co-PI Ray the investigates the historical impacts of labor scarcity, estimates PFPs for agricultural inputs, substitutability between labor and capital, and conduct scenario analysis of heat stress and changes in immigration policies. Co-PI Ray will also finalize a manuscript for a special issue of the journal Environmental Research Letters journal titled "Focus on Groundwater and Society: Sustainably Managing an "Invisible" Resource" that summarizes the findings from the Environmental and Resource Economics publication for an inter-disciplinary and international audience. We will additionally finalize and submit our manuscript led by Co-PI Hill that documents our agricultural labor sheds, employment estimates, and provides the dataset as a tool for researchers. We will submit this manuscript, entitled "Getting US Agricultural Labor Markets Right: Implications for Data, Modeling, and Policy Analysis" for publication at the journal of Applied Economics Perspectives and Policy (AEPP). We will present findings at the AAEA Annual Meeting in Denver in July 2025. Co-PI Ray will present the SIMPLE modelling framework as a flexible and spatially explicit analytical tool for the agricultural sector with a focus on challenges in the labor markets. Co-PI Ray will propose an organized session at the Annual Meetings with Co-PI Hill and other academics to present findings from this project. Co-PI's Hill and Ray will additionally present the new datasets produced for this project at a pre-conference workshop organized by Co-PI Hill and the labor economics section of the AAEA, aimed at equipping researchers with better data on the US agricultural workforce. In addition, we plan to pursue the relatively new activity focusing on the evaluation of the impacts of a warming climate and the resulting impacts on labor heat stress and productivity, explore the interaction of labor heat stress and drought, and consider the implications for agricultural production in the US.

Impacts
What was accomplished under these goals? The overall goal of this project is to understand the linkage between the functioning of local agricultural labor markets and the response of agriculture to environmental stressors, conservation policies and other shocks to the farm and food economy. To accomplish this objective, we will model labor markets at high resolution and embed these markets in a multiscale model of agriculture, land and water resources. We will use this framework to shed light on the effects of environmental stressors and policies on farm households, workers, and agricultural activity at the local, regional and national scales in the United States. Objective 1: Geographically identify the labor sheds for local and migrant agricultural workers. Objective 2: Develop an analytical framework and database for to analyze agricultural labor demand and supply and support multi-scale modeling of labor markets and fine-scale analysis of environmental stressors and conservation policies by extending the SIMPLE-G modeling framework. Objective 3: Evaluate the impacts of environmental stress and policy interventions on farm employment, wages, production and household welfare. Objective 4: Present findings, share the tools and analysis, and solicit feedback from key stakeholder groups. Regarding objective 1, in the prior project year, we had finalized the geographical boundaries for migrant agricultural labor sheds and were preparing a manuscript for publication that described these labor sheds. However, we decided that our contribution would be more substantive if this manuscript included key employment information at the labor shed level. Accordingly, in this year of the project we worked to assemble estimates of employment, wages, and hours both at the labor shed level and for different worker typologies. Compiling these estimates involved combining several data sources and has resulted in a final dataset that can be used as input for the gridded model (objective 2). We have a completed draft of the manuscript that describes the agricultural labor sheds, the methods for producing employment estimates, and summarizes these estimates at the national and labor shed levels. As part of submitting this manuscript for publication, we will also make our final, cleaned dataset available to other researchers, along with a replication package so that researchers can build on our work. We aim to submit this article for publication in the journal Applied Economics Perspectives and Policy in January of this year. Regarding objective 2, A theoretical paper, led by Srabashi Ray, has been accepted for publication in the journal Environmental and Resource Economics. This paper uses a theoretical framework to develop a set of foundational propositions that show labor markets mediate the effectiveness and distributional impacts of conservation policies. We find that under specific conditions, ignoring labor markets may lead to either over- or under-estimation of the success of conservation policies, measured in terms of resources conserved. The underlying theoretical framework identifies site-specific parameters (i.e., price elasticity of resources, substitutability between inputs, cost-share of resources and magnitude of the conservation policy shock) that explain the spatial heterogeneity in the implication of overlooking labor markets. We also find, that when labor markets are not explicitly modelled, we also overlook adverse distributional impacts where resource owners increase their rental earnings while farmworkers absorb lower wages. We are now finalizing the SIMPLE-G-LABOR model which is a fully developed gridded model that supports multi-scale modeling of labor markets and fine-scale analysis of environmental stressors and conservation policies. As an intervening step, we have developed the SIMPLE-CZ-LABOR model, which operates at the Commuting Zone level. In the SIMPLE-CZ-LABOR model we distinguish between different labor types i.e., local labor and migrant labor and delineate labor markets shed specific to migrant and local workers. This step allows us to run the model more efficiently and stress-test the framework at a more aggregated spatial scale. Regarding objective 3, we us the SIMPLE-CZ-LABOR model to develop a sound understanding of the changes in agricultural labor markets over a 15-year period (2002-2017) and its impacts on several aspects of the agricultural sector (such as employment, wages, resource use and mechanization). Using a novel estimation framework, we have estimated the changes in partial factor productivity (PFP) for three composite inputs, i.e., labor (aggregate of all types of workers), resources (land and water) and manufactured inputs. These PFP estimates are an important contribution to the literature and deepen our understanding of the drivers of productivity improvements in the agricultural sector. We use the theoretical framework developed in the Environmental and Resource Economics paper to highlight the challenges facing econometric approaches to estimate changes in PFP since the observed change in employment captures both the interactions between changes in input PFP and producers' decision to re-optimize the input mix due to relative changes in input prices. The structure of the SIMPLE-CZ-LABOR model plays an important role here to distinguish between these drivers of change. We are currently drafting a journal paper that discusses the historical impacts of labor scarcity and uses the SIMPLE-CZ-LABOR model to evaluate impacts of changes in immigration policies, minimum wage regulations and heat stress. And are proposing an organized symposium at the AAEA meetings on this theme. In addition, PI Hertel and Co-I Haqiqi collaborated with another member of the GLASS Lab at Purdue University to prepare a manuscript studying the impacts of heat stress on the agricultural workforce in the US. This paper is currently under review with the journal Nature Food. Regarding objective 4, we are excited to announce the publication of an open access book titled "SIMPLE-G: A Gridded Economic Approach to Sustainability Analysis of the Earth's Land and Water Resources", published by Springer. This book includes the theoretical and modelling advances related to agricultural labor markets. This is the first version of the SIMPLE-G model specifically tailored to evaluate the agricultural labor market at the grid cell level. This first version has a simple module for farm employment. We are planning to add more details as we make advances on labor market modeling. Currently, two crucial applications are implemented: climate labor heat stress and a groundwater sustainability policy. This tool was developed and implemented in an NSF-funded I-GUIDE Summer School, where graduate students from diverse backgrounds participated in hands-on learning about the intricate relationship between labor and agriculture. The link to the tool is https://mygeohub.org/resources/simplegus By utilizing the SIMPLE-G model, participants gained practical experience in analyzing the complex interplay between environmental and economic forces affecting agricultural workers. Through this interactive learning experience, graduate students gained valuable insights into the challenges and opportunities associated with ensuring the safety and well-being of agricultural workers in a changing environment. The paper emerging from this interdisciplinary collaboration is under review with the journal Nature Food (see below).

Publications

  • Type: Peer Reviewed Journal Articles Status: Accepted Year Published: 2024 Citation: Ray, Srabashi and Thomas W. Hertel. Effectiveness and distributional impacts of conservation policies: The role of labor markets, Environmental and Resource Economics (ERE). Accepted (Nov 14th, 2024).
  • Type: Conference Papers and Presentations Status: Published Year Published: 2024 Citation: Ray, Srabashi. Leveraging economic theory for spatially explicit analysis of sustainability policies, 27th Annual Conference on Global Economic Analysis (Fort Collins, CO) 2024.
  • Type: Conference Papers and Presentations Status: Awaiting Publication Year Published: 2024 Citation: Ray, Srabashi. Equity and Effectiveness of Conservation Policies: The Role of Labor Markets, Mid-west Economic Association, Chicago, 2024.
  • Type: Websites Status: Published Year Published: 2024 Citation: Web-based Data Tool: Interactive data visualization and dataset access for information on US farm employment: https://www.alexandraehill.com/projects/3342
  • Type: Websites Status: Published Year Published: 2024 Citation: Web-based Data Tool: Interactive data visualization and dataset access for information on CA farm employment and immigration status: https://www.alexandraehill.com/projects/4650
  • Type: Other Status: Published Year Published: 2024 Citation: Research Report: Hill, A.E. and Sayre, J.E. (2024). As Mexican Farmworkers Flock North, Will U.S. Farms Head South? ARE Update, 28(1): 9-12. University of California Giannini Foundation of Agricultural Economics. https://s.giannini.ucop.edu/uploads/pub/2024/10/29/v28n1_3.pdf
  • Type: Conference Papers and Presentations Status: Published Year Published: 2024 Citation: Hill, Alexandra E. Californias Farm Workforce: Trends and Outlook 2024 Agri-Pulse Food & Ag Issues Summit, Sacramento, CA.
  • Type: Conference Papers and Presentations Status: Published Year Published: 2024 Citation: Hill, Alexandra E. The US Farm Workforce Outlook: As Farmworkers Flock North, Will Jobs Move South? Farm Foundation Forum Webinar: Growing Together: Trends and Transformation in U.S. Agriculture Labor. https://www.farmfoundation.org/forums/growing-together-trends-and-transformation-in-u-s-agriculture-labor/
  • Type: Conference Papers and Presentations Status: Published Year Published: 2024 Citation: Hill, Alexandra E. As Farmworkers Flock North, Will Jobs Move South? National Council of Agricultural Employers 2024 Ag Labor Employer Forum.
  • Type: Conference Papers and Presentations Status: Published Year Published: 2024 Citation: Hill, Alexandra E. Evolving US Farm Labor Markets. UC-MX Farm Labor Research Cluster 2024 Annual Meeting.
  • Type: Conference Papers and Presentations Status: Published Year Published: 2024 Citation: Hill, Alexandra E. Getting US Agricultural Labor Markets Right: Implications for Data, Modeling, and Policy Analysis American Agricultural Economics Association 2024 Annual Meeting.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2025 Citation: Hertel, T.W., Economic Analysis of Global and Local Policies for Respecting Planetary Boundaries, Elmhirst Lecture given at the triennial meetings of the International Association of Agricultural Economists, New Delhi, India, August 3, 2024.
  • Type: Conference Papers and Presentations Status: Published Year Published: 2024 Citation: Hertel, T.W. and Iman Haqiqi, Economic Analysis of Planetary Boundaries: Six Lessons, presentation at the 27th Conference on Global Economic Analysis, Fort Collins, Colorado.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2024 Citation: Hertel, T.W. Global and Local Policies for Respecting Planetary Boundaries: Tradeoffs and Synergies, presentation to Environmental Sciences Workshop, Wageningen University, Wageningen, The Netherlands, March 13, 2024.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2024 Citation: Hertel, T.W. Global-to-Local-to-Global Analysis of Sustainability, presentation to the 11th Annual Forestry and Agriculture GHG Modeling Forum, Raleigh, NC, March 6, 2024.
  • Type: Conference Papers and Presentations Status: Published Year Published: 2024 Citation: Wang et al (in review  a collaboration with Haqiqi and Hertel). Impacts of Human Heat Stress on US Agriculture with 3�C warming: Multi-scale Responses and Spillover Effects. In review Nature Food.


Progress 01/01/23 to 12/31/23

Outputs
Target Audience:Policy makers, academics, farm organizations and non-governmental environment organizations. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Through bi-weekly project team meetings that consist of rotating presentations delivered by members of the project team, early-stage project team members have learned new modeling approaches, been introduced to new branches of literature, and have learned about effective grant management. For example, Co-PI Hill has learned about the SIMPLE-G modeling framework through a series of presentations delivered by Co-PIs Ray and Haqiqi explaining the SIMPLE-G framework, including model parameters and assumptions, and demonstrating applications. Co-PI Hill has also used a variety of materials from the project in her course curriculum. In particular, in Spring 2023, she co-developed a new course at Colorado State University in "Data-driven Decision Making for Agribusinesses" and showed the students (1) how the team used data to construct agricultural labor sheds; (2) how these labor sheds can be useful for policy-makers and government and community organizations that provide resources to migrant farmworkers and their families but who have faced increasing challenges in locating these workers at different times in the year; and (3) how our team is using these labor sheds to improve the accuracy of predictive models related to agricultural production, the environment, and labor markets. The students eagerly engaged with these materials and reported being excited to see a real-world application of an analysis that they were largely unaware of as a type of economic research. Hill has used these materials in a variety of outreach and extension presentations as summarized below, which serve to educate and train agricultural industry stakeholders across the country. Co-PI Taylor used methods and findings from this project in his large undergraduate course, Agricultural Labor, at UC Davis in Spring 2023. Material developed in this project will be included in an in-person SIMPLE-G course in the Spring of 2023. Two dozen researchers from the US, Latin America, Europe, Asia and Africa will participate in this course designed to introduce them to this Local-Global-Local research framework. Learners will be provided with predesigned examples to provide them hands on training in using the SIMPLE-G model. How have the results been disseminated to communities of interest?Co-PI Hill disseminated findings from this research to an array of industry stakeholders and academic audiences this past year through the following presentations: Hill, Alexandra E. "Projected and Actual Impacts of Labor Factors for Colorado Farms and Ranches." Colorado Fruit and Vegetable Growers Association 2023 Produce Labor Conference, Pueblo, CO. Hill, Alexandra E. "Trends in California's Crop Workforce." University of California Agriculture and Natural Resources Vegetable Crop Program Team Meeting, Salinas, CA. Hill, Alexandra E. "Trends in California Crop Worker Hours and Employment." 2023 University of California Davis Farm Labor Conference: Demand, Supply, and Markets, Davis, CA. PI Hertel presented findings from this research in a variety of venues the past year: Hertel, Thomas W. "Global and Local Policies for Respecting Planetary Boundaries: Tradeoffs and Synergies", virtual presentation to the workshop on Integrating Planetary Boundaries in Economic and Social Science Analysis, organized by the Department of Economics, University of Copenhagen, September 15, 2023. Hertel, Thomas W. "International Trade, Food Security and Environmental Sustainability", presentation to the Mandela-Washington Fellows, Purdue University, July 27, 2023. Hertel, Thomas W. "International Trade, Food Security and Environmental Sustainability", presentation to the IAMO Forum 2023, Halle, Germany, June 21, 2023. ?Hertel, Thomas W. "Global-to-Local-to-Global Analysis of Water Security", presentation to the National Science Foundation Advisory Committee for Environmental Research and Education, (virtual) April 5, 2023. Hertel, Thomas W. "Climate Change Impacts on Agricultural Labor and Low-income Households", presentation to the National Academy of Sciences Food Forum, (virtual) March 29, 2023. Hertel, Thomas W. "Global-Local-Global Analysis of Sustainability", Seminar at IFPRI, Washington, D.C., March 16, 2023. Hertel, Thomas W. "Global-Local-Global Analysis of Land and Water Sustainability", Seminar at ERS/USDA, Washington, D.C., March 15, 2023. What do you plan to do during the next reporting period to accomplish the goals?In 2024, we will use the recently published SIMPLEG-CZ (Ray et al. 2023) model to analyze impacts of a diminished supply of migrant workers, challenges of heat and moisture stress on farmworkers and policy initiatives related to the H-2 immigrant worker program and labor-saving technologies. We will continue to work on extending the gridded SIMPLEG-CZ model to split the aggregate farmworker input into different types of farmworkers such as local (settled) workers, migrant workers, directly hired workers and H-2 workers. This will contribute towards developing a SIMPLEG-LABOR model which is a gridded modelling of the complexities of agricultural labor markets in the US. The SIMPLEG-LABOR model will be a novel approach equipped to analyze the impacts of policies targeting farmworkers as well as stresses of resource overuse and climate change across different labor sheds. We will finalize our manuscript (related to objective 1) that summarizes and offers supporting and associated data for our delineations of agricultural labor sheds and submit it for publication in Applied Economics Perspectives and Policy. Upon completing this manuscript, we will turn our team efforts to produce analyses that incorporate these labor sheds. In particular, we will develop the SIMPLEG-LABOR model, demonstrate its improvements in accuracy over the SIMPLEG and SIMPLEG-CZ models in a back casting exercise, and apply the model to answer key policy questions related to the impacts of environmental and labor-related shocks and policies on US agriculture. The next year's workplan involves a strong focus on econometric estimation and model parameterization to improve the treatment of farm labor supply and demand at the labor shed level. We will also include product differentiation in the model to represent spatially heterogenous responses by farmers. In addition, we plan to incorporate non-agricultural labor availability at the labor shed level to improve the representation of agricultural labor supply. The SIMPLE-G-CZ model and data will be made publicly available via the GeoHub. We also plan to publish a paper developing the theoretical foundations of the SIMPLE-G model. We will present finalized migrant agricultural labor sheds, methodology, and results from an application at the 2023 AAEA Annual Meeting in Washington, D.C. The working title for this presentation and the accompanying paper is "Local Impacts of the Declining Supply and Mobility of US Farmworkers: A SIMPLE-G Modeling Approach". This paper will put labor-related issues at the forefront of the SIMPLE-G model and demonstrate how simulated decreases in aggregate labor supply from Latin America, shifts from migrant to local labor, and increases in labor-saving technology adoption combine to impact agricultural production. This paper and presentation will document and apply our migrant labor sheds from objective 1. In addition, we plan to begin a new activity focusing on the evaluation of the impacts of a warming climate and the resulting impacts on labor heat stress and productivity, explore the interaction of labor heat stress and drought, and consider the implications for agricultural production in the US.

Impacts
What was accomplished under these goals? Regarding objective 1, we have now finalized the geographical boundaries for migrant agricultural labor sheds. We developed these labor sheds through a combination of methods, including applying the commuting zone methodology to the employment flows of migrant crop workers, considering patterns of historical migrant flow and those based on production seasonality, and incorporating USDA farm resource regions, which reflect areas with different types of production and different farm characteristics. In addition, we have been working to collect the data necessary for the gridded model at these labor shed levels. This consists of estimates of total employment and costs of employment for different labor types. While compiling these statistics, we have learned about the intricacies and limitations of many sources of data on the US agricultural workforce. We believe that sharing what we have learned can benefit other researchers, and because of this we are incorporating a discussion of these data in our manuscript describing agricultural labor sheds. The in-progress manuscript also summarizes data on employment and wages at the labor shed level and for different employee types. In particular, it differentiates between local and migrant workers, farmworkers hired directly by farms and those hired by farm labor contractors, and H-2A visa workers. We plan to submit this article for publication in the journal Applied Economics Perspectives and Policy in the coming year. We continue to work on the development of a gridded labor market module and model validation strategies. Through weekly and bi-weekly meetings, different model closures have been discussed and evidence supporting each representation of gridded labor markets examined, including family labor, migrant labor, hired labor, contract labor, and the labor supply decisions of each. The initial estimation of payments to farmworkers has been revised based on improved methods to estimate wage rates and hours of work. Regarding objective 2, we have further refined our theoretical framework using a two-input stylized model typically used in the field of agricultural economics to highlight the importance of developing a sound understanding of agricultural labor markets. The framework shows how the agricultural labor supply elasticity interacts with supply elasticity of natural resources, input substitutability, and input cost shares to determine the impact of policy shocks on agricultural workers. In simulations of conservation policies, we show that in the absence of explicit modeling of agricultural labor markets one likely over-estimates the success (i.e., resources conserved) of conservation policies and completely ignores potential adverse effects of agricultural wages. A theoretical paper, led by Srabashi Ray, develops a set of propositions around labor market functioning and the distributional impacts of conservation policies in agriculture. It has been submitted to the journal Environmental and Resource Economics. Regarding objective 3, significant progress has been made in developing a gridded model to assess the intricate interplay between environmental policy interventions and their cascading effects on various indicators within the agricultural sector and other economic sectors. This model specifically focuses on the impacts of groundwater conservation policies on farm and non-farm wages and income. In addition, a gridded database has been established, leveraging data from the Bureau of Economic Analysis (BEA) on county-level wages and income for both farm and non-farm workers. This database has been integrated with gridded population data layers, providing a spatially explicit foundation for the general equilibrium features of the model. Initial calculations reveal a crucial "multiplier effect" emanating from the implementation of groundwater conservation policies. Lower farm income, triggered by these policies, induces a subsequent decrease in national income, ultimately reducing the overall demand for non-food commodities. While the impact is small in terms of percentage change, it is large considering the size of the US economy. This finding underscores the interconnected nature of the agricultural sector, and it highlights the need for comprehensive policy frameworks that consider the broader economic and social implications of environmental interventions. Further analysis and refinement of the model are currently underway to explore the complex relationships between climate-driven labor heat stress and its diverse impacts on farm employment and production. This ongoing research aims to provide new insights into previously-ignored impacts of climate change on the agricultural sector. Regarding objective 4, we are excited to announce the launch of a new tool on MyGeoHub.org: the first version of the SIMPLE-G model specifically tailored to evaluate the agricultural labor market at the grid cell level. This first version has a simple module for farm employment. We are planning to add more details as we make advances on labor market modeling. Currently, two crucial applications are implemented: climate labor heat stress and groundwater sustainability policy. This tool was developed and implemented in an NSF-funded I-GUIDE Summer School, where graduate students from diverse backgrounds participated in hands-on learning about the intricate relationship between labor and agriculture. The link to the tool is https://mygeohub.org/resources/simplegus By utilizing the SIMPLE-G model, participants gained practical experience in analyzing the complex interplay between environmental and economic forces affecting agricultural workers. The Summer School curriculum focused on two distinct scenarios: Groundwater Sustainability Policy:Participants explored the potential consequences of implementing groundwater conservation policies on employment,considering factors such as irrigation,water availability,and agricultural production shifts. Climate Impact:The model enabled participants to assess the projected impacts of climate change-induced heat stress faced by agricultural workers on agricultural production and the labor market,highlighting the role of adaptation decisions. Through this interactive learning experience, graduate students gained valuable insights into the challenges and opportunities associated with ensuring the safety and well-being of agricultural workers in a changing environment. A new publication (Ray et al., 2023) presents a quantitative model of US agriculture with an explicit treatment of the farm labor market. It is a gridded multi-scale extension of the SIMPLE-G-US model, a Simplified International Model of agricultural Prices, Land use and the Environment-Gridded version for the United States. This extension of the model introduces a labor module that explicitly considers labor in the production function. This model has been used to highlight the importance of labor markets in determining the distributional impacts of a groundwater sustainability policy in the Western US. To date, integrated assessment models with fine scale representation of production have assumed that labor moves freely across sectors and is therefore unaffected by policies. However, our paper shows that farm wages could fall by as much as 25% in parts of California under a stringent groundwater conservation policy (Ray et al., 2023).

Publications

  • Type: Journal Articles Status: Published Year Published: 2023 Citation: Ray, Srabashi, Iman Haqiqi, Alexandra E. Hill, J. Edward Taylor and Thomas W Hertel. (2023) Labor markets: A critical link between global-local shocks and their impact on agriculture, Environmental Research Letters.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2023 Citation: Hertel, Thomas W. SIMPLE-G: A Global Gridded Framework for Analysis of Food Security and Sustainability, presentation at the Annual Conference on Global Economic Analysis, Bordeaux, France, June 14, 2023.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2023 Citation: Hertel, Thomas W. Global-Local-Global Analysis of Land and Water Sustainability, Plenary address to the annual meetings of the Australasian Agricultural and Resource Economics Society, (virtual), February 8, 2023.
  • Type: Conference Papers and Presentations Status: Published Year Published: 2023 Citation: Haqiqi, I., Wang, Z., Ray, S., Baldos, U., Liu, J., & Hertel, T. (2023). Market-Mediated Effects: What Are they? And why are They Important for Geospatial Analysis of Sustainability Policies. Forum 2023 - Harnessing The Geospatial Data Revolution for Sustainability Solutions, Columbia University, New York. doi.org/10.5703/1288284317682
  • Type: Conference Papers and Presentations Status: Published Year Published: 2023 Citation: Haqiqi, I. (2023). Quantifying the uncertainties in estimating the heterogeneous effects of carbon taxes on labor, land, water, and fertilizer use in US agriculture. In 2023 Annual Meeting, July 23-25, Washington DC (No. 335881). Agricultural and Applied Economics Association.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2023 Citation: Haqiqi, I. (2023). SIMPLE-G model, data, parameters, and implementation. In 26th Annual Conference on Global Economic Analysis, June 14-16, 2023, Bordeaux, France. Center for Global Trade Analysis.


Progress 01/01/22 to 12/31/22

Outputs
Target Audience:Policy makers, academics, farm organizations and non-governmental environment organizations. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Through bi-weekly project team meetings that consist of rotating presentations delivered by members of the project team, early-stage project team members have learned new modeling approaches, been introduced to new branches of literature, and have learned about effective grant management. For example, Co-PI Hill has learned about the SIMPLE-G modeling framework through a series of presentations delivered by Co-PIs Ray and Haqiqi explaining the SIMPLE-G framework, including model parameters and assumptions, and demonstrating applications. In addition, Co-PI Hill has gained extensive insight into grant management from observing the process and approach taken by PI Hertel in administering tasks, setting deadlines, and organizing regular meetings. Participating in this grant has led to improvements in Co-PI Hill's organization and delegation in her recently awarded New Investigators NIFA grant. Overall, Co-PI Hill's participation in this grant has contributed to her development as a researcher and project manager. Material developed in this project was included in an in-person SIMPLE-G course in the Spring of 2022. Sixteen researchers, interested in the Local-Global-Local research framework, were trained in the SIMPLE-G model using the aforementioned theoretical framework. Learners were also provided with predesigned examples to provide them hands on training in using the SIMPLE-G model. How have the results been disseminated to communities of interest?Co-PI Hill presented the project's research methodology for delineation of migrant agricultural labor sheds (objective 1) at the 2022 AAEA Annual Meeting in Anaheim California, along with preliminary results. The presentation was titled "Migratory Patterns of US Crop Workers: Geographically Defining Agricultural Labor Markets" and was part of the AAEA International Section's Track Session on Labor in Agri-Food Systems. Co-PI Ray submitted a paper to the interdisciplinary journal: Environmental Research Letters based on findings from our first year of research. Revisions were requested and these changes have been made. The paper is now under second round review. Co-PI Taylor presented preliminary findings at the UC Davis 2022 Research Expo; https://globalmigration.ucdavis.edu/events/postpandemic-human-migration-impact-us-economy-agriculture-and-society PI Hertel presented findings from this research in a variety of venues (seven different universities and research institutes) during his sabbatical in Germany. What do you plan to do during the next reporting period to accomplish the goals?The next year's workplan involves a strong focus on econometric estimation and model parameterization to improve the treatment of supply and demand for labor at the labor shed level. We will also include product differentiation in the model to represent the spatially heterogenous responses by farmers. In addition, we plan to incorporate non-agricultural labor availability at the labor shed level to improve the representation of agricultural labor supply. In addition, the SIMPLE-G-CZ model and data will be made publicly available via the GeoHub. We also plan to publish a paper developing the theoretical foundations of the SIMPLE-G model. We will present finalized migrant agricultural labor sheds, methodology, and results from an application at the 2023 AAEA Annual Meeting in Washington, D.C. The working title for this presentation and the accompanying paper is "Local Impacts of the Declining Supply and Mobility of US Farmworkers: A SIMPLE-G Modeling Approach". This paper puts labor-related issues at the forefront of the SIMPLE-G model and demonstrates how simulated decreases in aggregate labor supply from Latin America, shifts from migrant to local labor, and increases in labor-saving technology adoption combine to impact agricultural production. This paper and presentation will document and apply our migrant labor sheds from objective 1. In addition, we plan to begin a new activity focusing on the evaluation of the impacts of a warming climate and the resulting impacts on labor heat stress and productivity. We will also look at the interaction of labor heat stress and drought and the implications for agricultural production in the US.

Impacts
What was accomplished under these goals? This project has four main objectives: Objective 1: Geographically identify the labor sheds for local and migrant agricultural workers. Objective 2: Develop an analytical framework and database for to analyze agricultural labor demand and supply and support multi-scale modeling of labor markets and fine-scale analysis of environmental stressors and conservation policies by extending the SIMPLE-G modeling framework. Objective 3: Evaluate the impacts of environmental stress and policy interventions on farm employment, wages, production and household welfare. Objective 4: Present findings, share the tools and analysis, and solicit feedback from key stakeholder groups. Regarding objective 1 we have developed preliminary geographical boundaries for migrant agricultural labor sheds. To develop these, we consulted Chris Fowler, Associate Professor of Geography and Demography at Penn State University who developed the most recent commuting zone delineations for all US labor markets. With Dr. Fowler's assistance, we replicated the hierarchical clustering algorithm used to establish commuting zones in both the ACS and NAWS data (as proposed). Given fewer observations of agricultural workers compared with the entire U.S. labor market, this algorithm did not yield useful labor shed delineations based on commuting and working patterns alone. Because of this, we have included additional criteria in the algorithm to assign two counties as relatively "similar", these include: county adjacency, USDA production region, and the measure of proportional (commuting) flow used in the commuting zone algorithm. Our preliminary migrant labor shed delineations divide the US into 5 labor sheds based on these criteria. We are currently using commuting zones as the relevant labor market delineation for local agricultural workers. Regarding objective 2: We have developed a theoretical framework using a two-input stylized model, typically used in the field of agricultural economics, to highlight the importance of developing a sound understanding of agricultural labor markets. We show that the agricultural labor supply elasticity interacts with supply elasticity of natural resources, input substitutability, and input cost shares to determine the impact of policy shocks on agricultural workers. Specifically, in the context of conservation policies, we show that in the absence of explicit modeling of agricultural labor markets, we likely over-estimate the success (i.e. resources conserved) of conservation policies and completely ignore potential adverse effects of agricultural wages. We also develop a novel 'bridging' methodology which can be used to delve into the simulation results from the SIMPLE-G model and understand them in terms of theoretically grounded producer behavior. This 'bridging' exercise allows the researchers to replicate model simulation results in terms of the parameters introduced in the aforementioned theoretical framework. In addition, we completed a preliminary working version of our quantitative, model of US agriculture and the associated datasets. It is a gridded multi-scale model of agricultural production focused on farm workers. We include agricultural labor in an extension of the SIMPLE-G-US model, a Simplified International Model of agricultural Prices, Land use and the Environment- Gridded version for the United States. This extension of the model introduces a labor module that explicitly considers migrant and non-migrant labor in the production function. The model links gridded production of crops to local and regional agricultural markets (inputs and outputs). Each grid cell has a nested CES (constant elasticity of substitution) production function determining the demand for inputs by irrigated and non-irrigated practices. The supply of agricultural inputs is either local (water and land) or regional (fertilizer) or sub-regional (labor commuting zones). The supply of labor to different grid cells within each commuting zone is determined using an additive CET (constant elasticity of transformation). The USDA Census of Agriculture data helped us to calculate the share of labor input in total expenses used to inform the CES function. The county level information is downscaled to grid-cells assuming uniform distribution of cost shares across grid cells in each county. To inform the CET function, we relied on the Census to calculate share of migrant labor and its distribution. Preliminary findings from this research have highlighted that under increasing agricultural labor market rigidities, experienced by countries across the agricultural transformation, the structure of agricultural labor markets are crucial in understanding the impact of exogenous policy shocks. In light food price shocks, due to a combination of factors including the Ukraine crisis, we show that increases in employment and agricultural production are likely to be over-estimated if we ignore labor market rigidities. In the case of a groundwater conservation policy, the extent of resource conservation is likely to be over-estimated if we don't not model labor markets explicitly. Further, the distributional effects of policy shocks in terms of adverse wage effects are completely ignored in integrated assessment modeling undertaken to date. However, these effects are significant in preliminary analysis.

Publications

  • Type: Journal Articles Status: Under Review Year Published: 2022 Citation: Ray, S., I. Haqiqi, A. Hill, J.E. Taylor and T.W. Hertel (in review). "Labor markets: A critical link between global-local shocks and their impact on agriculture".
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2022 Citation: Hill, A. (2022) "Migratory Patterns of US Crop Workers: Geographically Defining Agricultural Labor Markets" paper presented at the annual meetings of the AAEA, Anaheim, CA.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2022 Citation: J.E. Taylor (2022) "Postpandemic Human Migration: Impact on the U.S. economy, agriculture and society" UC Davis Research Expo.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2022 Citation: Hertel, T.W. Global-Local-Global Analysis of Groundwater Scarcity, Department of Geography and IRI-THESys, Humboldt University, Berlin, Germany, December 9, 2022.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2022 Citation: Hertel, T.W. Global-Local-Global Analysis of Land and Water Sustainability, Institute of Agricultural Trade and Development, Humboldt University, Berlin, Germany, November 30, 2022.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2022 Citation: Hertel, T.W. Global-Local-Global Analysis of Land and Water Sustainability, Institute-wide seminar at the Thuenen Institute, Braunschweig, Germany, November 2, 2022.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2022 Citation: Hertel, T.W. Global-Local-Global Analysis of Land and Water Sustainability, Institute-wide seminar at the Helmholtz Center for Environment Research, Leipzig, Germany, October 24, 2022.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2022 Citation: Hertel, T.W. Global-Local-Global Analysis of Land and Water Sustainability, Seminar for the Department of Agricultural Economics, University of Copenhagen, October 11, 2022.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2022 Citation: Hertel, T.W. Global-Local-Global Analysis of Sustainability Challenges, seminar at the Center for Development Studies, University of Bonn, Germany, September 27, 2022.
  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2022 Citation: Hertel, T.W. Global-Local-Global Analysis of Sustainability Challenges, institute-wide research seminar at the Potsdam Institute for Climate Research (PIK), Potsdam, Germany, July 12, 2022.