More Arms, More Power? The Impact of Immigration on Farming and Technology Choices in US Agriculture in Early 20th Century

Jeanne Lafortune, University of Maryland
Jose Tessada, The Brookings Institution
Carolina Gonzalez, University of Maryland

How do technological progress and the adoption of new technology respond to the availability of complementary factors or the price of such factors? This paper attempts to answer this question in the context of US agriculture in the first four decades of the twentieth century using immigration as a shock to the labor supply available to agricultural production. Instrumenting for the immigration flow using past stocks as predictors of the location decision of newly arrived farmers, we find that states which receive a larger number of immigrant farmers tend to have specialized in the production of more labor-intensive crops and to have lower levels of capital use, even within the production of a given crop. These results suggest that labor markets were capable of absorbing the inflow of labor through other means than by lowering the wages of agricultural workers that is by changing the way agricultural production is structured.