More hands, more power? Estimating the impact of immigration on output and technology choices using early 20th century US agriculture

We study the impact of immigration-induced changes in labor supply within agriculture in the US during early 20th century, a sector where shifting output mix may be easier than in previously studied industries (manufacturing), on output and production choices. We find evidence of output mix adjustments at the county-level in response to immigration as predicted by trade models. Moreover, that response is only visible in diversified counties. Counties with higher initial specialization, likely with higher degree of factor (land) specificity, responded instead through input mixes and organizational changes. Suggestive evidence indicates that crop mix adjustments alone, without organizational changes, absorbed an important part of changes in labor endowments in diversified counties.