Immigrant Workers and Technological Change in U.S. Agriculture: A Profit Maximization Approach of Induced Innovation

This paper analyzes changes in U.S. agricultural technology during 1960-1999, emphasizing the role of immigrant workers on farm mechanization. The rates and directions of biased technological change based on the induced innovation theory are compared before and after the passage of the Immigration Reform and Control Act of 1986 which was intended to reduce employment of unauthorized workers. Unlike previous studies of induced innovation, this paper develops a new theoretical and empirical model of induced innovation using a profit maximization approach. The contribution of the profit maximization approach is that it allows changes in output combinations as a result of technological change. We found that the technology was biased against hired and self-employed labor, and toward capital during the study period. Although the bias against labor diminished considerably after 1986, the bias toward capital did not change appreciably after 1986. An important insight via the profit maximization approach is that the technology became biased in favor of labor intensive, perishable crops after 1986.