Health Insurance Boosts Profits for Agricultural Employers

A recent study published in the American Journal of Agricultural Economics reveals that agricultural employers who provide health insurance to farmworkers see higher profits, even after considering the cost of coverage. The research analyzed over three decades of data from California, highlighting that insured farmworkers earn more and are more productive. Despite ongoing labor shortages, many employers hesitate to offer health insurance due to concerns over transient workers and immediate costs outweighing future benefits. The study indicates that providing health benefits could make agricultural jobs more attractive to U.S. citizens as the workforce shifts towards a higher proportion of U.S. citizens.

Farmworkers, often immigrants, face significant health care access challenges, exacerbated by low wages and the nature of their employment. Many are ineligible for private insurance and experience high stress levels due to job uncertainty, contributing to poor health outcomes. The interaction between employer-provided health insurance and labor market dynamics creates complexities in understanding the relationship between wages, productivity, and worker retention. Encouraging health insurance provision may be key to improving both employer returns and worker welfare.