The MTEs generated by the nonparametric methods shown in Figures 3 through 5 are quite
different from the parametric MTE. Again, the WTP interpretation may offer some explanation
for the three different segments exhibited by the MTEs along the ud range. On the downward
sloping segments, individuals who have lower unobservables are more likely to participate in a
legalization program and exhibit a large willingness to pay for legal status acquisition. Toward
the middle segment of the MTEs (~0.51) however, it is possible that workers are more difficult
to categorize in terms of legal status on the basis of their observable and unobservable
characteristics and therefore are the least willing to pay for legal status relative to other
individuals. Individuals with high unobservables fall within the upper segment of the MTE.
They exhibit high willingness to pay for legal status, arguably because they have a lower
likelihood of gaining legal status due to unfavorable unobservable characteristics. On account of
the lower likelihood of becoming legalized, these individuals are likely to have fewer options for
employment in other sectors but may possibly be more productive than their cohorts with legal
status.
Policy Implications
Much of the political warring over immigration reform stems from proposed legalization
of unauthorized immigrants - whether it would reward illegal behavior and encourage future
illegal immigration or whether it would serve the nation’s interests better to adjust unauthorized
workers to legal status to prevent shocks to the labor intensive industries that mostly hire them.
In addressing these issues, AgJOBS seeks to stabilize the crop farm workforce that is extremely
vulnerable to immigration reform that may affect labor supply, wages and labor costs.
The average treatment effect on the untreated (ATEU) parameter offers key insight as to
how earnings may be potentially affected by a legalization program such as AgJOBS. The
average earnings gains range from 0.1002 to 0.1784, suggesting potential earnings increases
16