We study the firm-level impacts of a labor supply shock induced by the unanticipated closure of the New Zealand border due to the Covid-19 pandemic. The border closed in March 2020, in the middle of the autumn arrival season for workers under the Recognised Seasonal Employer scheme, causing seasonal migrants not to enter the country as planned. We identify firms that were expecting workers, but the workers did not arrive before the border closure, and compare these firms to other firms where the workers came just before the border closure. We study the firm-level response to these ‘missing migrants.’ Did affected firms hire other workers? Did wages need to increase to do so? Was productivity lower as a result? We find that firms whose seasonal workers failed to arrive could partially substitute to other workers – a combination of working holidaymakers and New Zealand citizens/residents – but experienced lower employment levels. We find no evidence that firms with missing migrants increased wages to attract other workers. We find suggestive evidence that firms with missing migrants experienced a productivity loss of up to 8%.
