An offer that you can't refuse? Agrimafias and Migrant Labor on Vineyards in Southern Italy

Caporalato is a widespread system of illegal recruitment and exploitation of underpaid farm labor run by Italian agrimafias. Most of this labor consists of irregular migrants vulnerable to exploitation due to their illegal status and the need of documents. In the 2011 migration wave over 64,000 migrants illegally landed on southern Italian coasts, and many of them may have supplied illegal workforce to farms through caporalato. To test this hypothesis, we evaluate the causal effects of the 2011 migration wave on measured labor productivity focusing on vineyards in southern Italy. Using a dynamic panel data model, our results show a significant increase of labor productivity by about 11\% on average for 2011 and 2012. This effect is found to be robust against various model specifications, and is validated using a synthetic control approach. We interpret this finding as an underreporting of labor input, i.e., an increasing employment of illegal workforce due to the migration wave.