Labor Supply and Directed Technical Change: Evidence from the Termination of the Bracero Program in 1964

Shmuel San

American Economic Journal: Applied Economics, 2023, vol. 15, issue 1, 136-63

Abstract: This paper studies the impact of labor supply on the creation of new technology, exploiting a large exogenous shock to the US agricultural labor supply caused by the termination of the Bracero agreements between the US and Mexico at the end of 1964. Using a text-search algorithm allocating patents to crops, I show a negative labor-supply shock induced a sharp increase in innovation in technologies related to more affected crops. The effect is stronger for technology related to labor-intensive production tasks. Farm-value dynamics indicate that, despite the positive technology reaction, the policy change was undesirable for farm owners.

JEL-codes: J22 J43 N32 O33 O34 Q12 Q16 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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DOI: 10.1257/app.20200664

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