HYSTERESIS AND THE SHORTAGE OF AGRICULTURAL LABOR

Fruit and vegetable growers often allege a shortage of agricultural wo rkers, but in a review of the H2A nonimmigrant guestworker program the General Accounting Office claims that no such shortage exists. The ap parent shortage may be due to workers that are in the labor force but do not choose to take agricultural jobs. According to real options the ory, when nonagricultural jobs are uncertain, workers require added in centive to invest in sectoral migration. Estimates of an arbitrage mod el in monthly Washington state wage data show the labor-shortage proba bility to be far greater than the probability of a surplus.