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On Estimating The Effects of Legalization: Do Agricultural Workers Really Benefit?

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  • Sampaio, Breno Ramos
  • Sampaio, Gustavo Ramos
  • Sampaio, Yony
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    Abstract

    The question of whether legalization affects the economic returns of immigrants has been the focus of many empirical studies in the past two decades. Their results have consistently shown that there exists significant wage differences between legal and illegal workers. However, the validity of such findings have been questioned by many researchers, given the lack of good identification strategies to correctly account for omitted variables. In this article we move away from the methods previously used in the literature, which in most part rely on selection on observables, and propose to use recently developed techniques designed specifically to address the issue of selection into treatment based (in some degree) on unobservable variables. Our results highlight that measuring such effects is much more difficult, from an econometrics standpoint, than what previous analysis claim and suggest that lower skill levels and not discrimination explain differences in economic outcomes of immigrants.

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    Bibliographic Info

    Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 126858.

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    Date of creation: 2012
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    Handle: RePEc:ags:iaae12:126858

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    Keywords: economic outcomes; undocumented workers; immigration; identification; Labor and Human Capital; J31; J32; J43; J71;

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    1. Lofstrom, Magnus & Hill, Laura E. & Hayes, Joseph, 2010. "Did Employer Sanctions Lose Their Bite? Labor Market Effects of Immigrant Legalization," IZA Discussion Papers 4972, Institute for the Study of Labor (IZA).
    2. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
    3. Daniel Millimet & Rusty Tchernis, 2008. "Minimizing Bias in Selection on Observables Estimators When Unconfoundness Fails," Caepr Working Papers 2008-008, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
    4. Neeraj Kaushal, 2006. "Amnesty Programs and the Labor Market Outcomes of Undocumented Workers," Journal of Human Resources, University of Wisconsin Press, vol. 41(3).
    5. Black, Dan A. & Smith, J.A.Jeffrey A., 2004. "How robust is the evidence on the effects of college quality? Evidence from matching," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 99-124.
    6. Lien H. Tran & Jeffrey M. Perloff, 2002. "Turnover in U.S. Agricultural Labor Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 427-437.
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