The effects of E-Verify on the share of labor-Intensive and capital-Intensive crops: Evidence from farm-level data

Immigration enforcement policies, such as E-Verify, have a negative effect on the US supply of farm labor. A growing literature finds that agricultural producers in the United States are facing a shrinking labor supply, while only a few studies examine how agricultural producers are adjusting to having less labor. This study examines how a shrinking labor force affects agricultural production decisions, specifically in terms of labor-intensive and capital-intensive crops. With less labor it is more challenging for agricultural producers to produce labor-intensive crops when there is no available technology to substitute for labor. We use E-Verify enforcement laws as a quasi-natural negative labor shock and data from the Agricultural Resource Management Survey to examine this issue. We find a decline in the production of labor-intensive crops and an increase in the production of capital-intensive crops in the states that have enforced “strong” E-Verify laws. Based on our results, the opposite is true for “weak” E-Verify states. [EconLit Citations: Q12, Q18, J6, K37].