International trade in commodities and labor: the case of the importation of Mexican agricultural labor and fresh market winter tomatoes into the US, 1964-1979

Steven John Torok

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: Currently, the United States is experiencing one of its most rapid periods of immigration in recent history, even though the Immigration Act of 1965 has established a quota of allowing approximately 120,000 legal Western hemisphere immigrants each year. The apparent paradox of rapid immigration in times of strict immigration legislation is due to the large numbers of Mexicans that are immigrating illegally to the United States and entering the labor force each year;The objectives of this study are: (1) To develop a 2-country, 1-commodity, 1-factor extended partial equilibrium trade model that will explain immigration and commodity and labor markets of the origin and destination countries. (2) To fit an empirical specification of this model to the U.S.-Mexican markets for traded winter tomatoes and for low-skilled farm labor during December-June for the period of 1964-1979. (3) To draw policy implications for illegal Mexican immigration into the United States;The situations of a large labor immigration from Mexico to the U.S. and the production of winter fresh tomatoes in Florida and Mexico have provided a unique setting for the adoption of a simple extended partial equilibrium trade model. A simple two-country, one-factor, and one-output extended partial equilibrium trade model has been developed to illustrate the interactions of the commodity and labor markets of Mexico and the U.S. and to provide for policy analysis in influencing the flow of illegal Mexican immigration. The results from the extended partial equilibrium trade model provide policy prescriptions that can be adopted by policy decision makers in the U.S. and Mexico in order to influence the flow of illegal Mexican immigration to the United States;The policy analysis suggests that Mexico and the U.S. should have cooperative domestic economic, trade and immigration policies in order to reduce the flow of illegal Mexican immigration. Mexico should encourage the further development of labor-intensive commodity production in order to absorb their excess supply of labor. The U.S. should coordinate trade policies that encourages the importation of labor-intensive commodities from Mexico rather than labor itself.

Date: 1982-01-01
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