Date of Award

8-4-2015

Degree Type

Thesis

Degree Name

Master of Arts (MA)

Department

Economics

First Advisor

Dr. Barry Hirsch

Abstract

The United States enjoys a per-capita gross domestic product more than five times the size of Mexico (World Bank, 2015). Yet the immigration policies of the United States fail to recognize the incentives workers in Mexico have to immigrate, legally or otherwise, into the United States. The law alone fails to control the movement of people across a 1,900-mile land border. Immigration has contributed to the economic and cultural dynamism of the United States. In the short-run, it may create economic winners and losers, leading to domestic tension.

After Congress debated and then rejected President George W. Bush’s immigration overhaul in 2007, state governments started adopting laws and rules targeting illegal immigrants. Many of those laws forced employers to use the electronic E-Verify system to check whether prospective hires were eligible to work in the United States. Typically, the primary goal was to bar illegal immigrants from the workforce. Additional goals included boosting the employment prospects and earnings of legal residents, and encouraging illegal immigrants to voluntarily leave markets governed by E-Verify requirements. Politicians focused particular attention on the U.S. agricultural industry, which is not surprising since U.S. Department of Agriculture surveys show roughly half the agricultural workforce is working in the country illegally. Farmers say they hire illegal workers because they cannot find enough U.S. workers to harvest labor-intensive produce and livestock.

Supporters of the E-Verify law in Georgia said one of their policy goals was to encourage farmers to secure legal, foreign laborers through the federally run H2A visa program. The H2A system allows growers facing domestic labor shortages to import foreign laborers for up to 10 months, though the program is bureaucratically cumbersome and requires that cost-sensitive growers pay above-market wages.

To determine whether E-Verify laws encourage H2A use, the author reviewed every state E-Verify law affecting the agricultural industry. After aggregating H2A usage data at the state level, the author conducted a fixed-effects regression that controls for years, monthly seasonal fluctuations, state effects, H2A wage costs, and the relative strength of a state’s E-Verify law. While there is anecdotal evidence that E-Verify laws may disrupt labor markets, there is little statistical evidence that state E-Verify laws cause farmers to increasingly rely on the H2A system. Surprisingly, there is statistical evidence that the strictest E-Verify laws may reduce H2A usage.

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