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On Estimating The Effects Oflegalization: Do Agricultural Workers Really Benefit?

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  • BRENO RAMOS SAMPAIO
  • GUSTAVO RAMOS SAMPAIO
  • YONY SAMPAIO

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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Suggested Citation

  • Breno Ramos Sampaio & Gustavo Ramos Sampaio & Yony Sampaio, 2014. "On Estimating The Effects Oflegalization: Do Agricultural Workers Really Benefit?," Anais do XL Encontro Nacional de Economia [Proceedings of the 40th Brazilian Economics Meeting] 188, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
  • Handle: RePEc:anp:en2012:188
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    References listed on IDEAS

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    1. Amy M. G. Kandilov & Ivan T. Kandilov, 2010. "The Effect of Legalization on Wages and Health Insurance: Evidence from the National Agricultural Workers Survey," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(4), pages 604-623.
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    6. Sherrie A. Kossoudji & Deborah A. Cobb-Clark, 2002. "Coming out of the Shadows: Learning about Legal Status and Wages from the Legalized Population," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 598-628, July.
    7. 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 of Labor Economics (IZA).
    8. Millimet, Daniel L. & Tchernis, Rusty, 2008. "Minimizing Bias in Selection on Observables Estimators When Unconfoundness Fails," IZA Discussion Papers 3632, Institute for the Study of Labor (IZA).
    9. Francisco L. Rivera-Batiz, 1999. "Undocumented workers in the labor market: An analysis of the earnings of legal and illegal Mexican immigrants in the United States," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(1), pages 91-116.
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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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