Foreign Direct Investment and Education Investment in Developing Countries

We introduce a model to explain the economic rationale for the observed policy combination of a developing country (hosting foreign direct investment (FDI) through education investment (EDI)) and the interest of a multinational corporation (MNC) in the local labor quality when it contemplates FDI. Information on local labor is the source of a more efficient contract for the MNC with local labor, and the local government can benefit both agents through EDI, FDI, and information sharing. This strategy set is likely to be used by a country in the early stage of economic development. The education level chosen by the local government, however, will be higher than that which maximizes the welfare of local labor. In that sense, the government has the incentive to benefit itself and the MNC at the expense of local labor.International Relations/Trade, Labor and Human Capital,

IMMIGRATION POLICY AND THE AGRICULTURAL LABOR MARKET: THE EFFECT ON JOB DURATION

We have proposed and estimated a Heckman-type two stage model with legal status of farm workers using an ordered probit model in the first stage and a duration model in the second stage. Using the National Agricultural Workers Survey, self-reported legal status categories are: unauthorized, authorized, permanent resident, or citizen. The duration model is estimated conditionally upon the worker's legal status to address selectivity bias. The duration estimation has significant coefficients on the selection bias correction term for all legal status equations except for that of citizen workers. The most important finding from our estimation is that unauthorized workers do not necessarily have shorter farm job durations than legal workers. First, the average predicted farm job duration for unauthorized workers is the second longest among the four legal status categories. Second, the simulation analysis indicates that the duration of the "typical" unauthorized worker will be longer when working under an authorized or permanent resident status.Labor and Human Capital,

Legal Status and U.S. Farm Wages

Using National Agricultural Workers Survey data, we estimate U.S. farm worker wage differentials by legal status. In order to adequately correct sample selection bias, we develop a Heckman-type two-stage method with an ordered probit model in the first stage and a wage equation model in the second stage.Farm Management,

Labor Cost and Technology Adoption: Least Squares Monte Carlo Method for the Case of Sugarcane Mechanization in Florida

The prospect of immigration reform has renewed farmers’ concerns of serious labor shortages and cost increases, which may urge highly labor-intensive specialty crop farmers to switch to less-labor-intensive technology. The large-scale mechanization of the Florida sugarcane harvest during the 1970s/80s serves as an historical example of how technologies evolved due to changes in local labor market conditions. We analyze the dynamic decision-making process of sugarcane farmers in the relevant period using net present value (NPV) approach and real options approach (ROA) with least squares Monte Carlo (LSMC).Crop Production/Industries, Labor and Human Capital, Research and Development/Tech Change/Emerging Technologies,

Implications of Proposed Immigration Reform for the U.S. Farm Labor Market

Specialty crop agriculture may be affected by immigration reform given that most farm workers are foreign-born and unauthorized for U.S. employment. Controlling for selection on legal status and job type according to skill level, this research examines the wage effects for workers with different characteristics in the U.S. and South.Labor and Human Capital,

PROPOSED IMMIGRATION POLICY REFORM & FARM LABOR MARKET OUTCOMES

The issue of legalization for unauthorized farm workers is examined in this paper. The analytical framework uses a treatment effects approach which casts legalization as a treatment under the assumption of heterogeneity. The results show an overall positive impact of legalization on farm worker wage outcomes and with the expected positive sorting on the gains from legal status.International Relations/Trade, Labor and Human Capital,

Farm Employment Transitions: A Markov Chain Analysis with Self-Selectivity

A stationary, first-order Markov chain model with selection bias correction for legal status is estimated by maxixmum likelihood methods using the National Agricultural Worker Survey data for 1989-2004 to evaluate the likelihood of workers staying in U.S. agriculture by legal status. Although the conditional steady state probability in US agriculture is highest for uanauthorized workers, there is little difference between legal statuses. Simulations of the estimated model indicate that a legal status change for unauthorized workers would result in only small changes in the steady state probability of being in US agriculture, particularly after 2001.Labor and Human Capital,

Labor Cost and Value of Citrus Operations with Alternative Technology: Enterprise DCF Approach

The prospect of immigration policy reform has renewed growers’ concerns of serious labor shortages and cost increases given that a large portion of the workforce is unauthorized for U.S. employment. This concern of labor shortages and cost increases is more serious for specialty crop agriculture which is highly labor intensive. Specialty crop growers may address the problem in various ways, but likely options include adoption of mechanical harvesting. In the current paper we study the citrus industry case and estimate the value for two operational modes (hand and mechanical harvesting) using the enterprise discounted cash flow (DCF) approach. Further we implement a simulation to forecast how the value for each operational mode would change with a change in cost scenario.Value, Enterprise DCF approach, Labor cost, Citrus operations, Mechanization, Agricultural Finance, Labor and Human Capital, Q14, J43,

Labor Cost and Technology Adoption: Real Options Approach for the Case of Sugarcane Mechanization in Florida

Specialty crop farmers have expressed concern about labor shortages and cost increases which may arise with immigration reform. The large-scale mechanization of the Florida sugarcane harvest during the 1970s/80s serves as an historical example of how technologies evolved due to changes in local labor market conditions.Crop Production/Industries, Labor and Human Capital, Research and Development/Tech Change/Emerging Technologies,

Harvest Cost and Value of Citrus Operations with Alternative Technology: Real Options Approach

The prospect of immigration policy reform has renewed growers’ concerns of serious labor shortages and cost increases. These concerns are more serious for specialty crop agriculture, not only because it is highly labor intensive, but also it requires labor in a very short period, particularly at harvest time. Two representative approaches of the investment valuation have been applied to the case of harvesting mechanization for the model citrus grower in Florida. Specifically, we applied the NPV approach and the real options approach (ROA) to processed-market Hamlin orange operations in Southwest Florida.Real options, NPV, mechanization, immigration policy, harvest cost, citrus operations, Agribusiness, Agricultural Finance, Farm Management, Labor and Human Capital, Risk and Uncertainty, Q14 – Agricultural Finance, J43 – Agricultural Labor Markets,