PROPOSED IMMIGRATION POLICY REFORM & FARM LABOR MARKET OUTCOMES



Table 6 Treatment effects of legalization

Parametera

Parametricb

Method______

Polynomial

Method________

Nonparametric

Method I_____

Nonparametric

Method II_____

ATET

0.1043

0.2385

0.2635

0.2538

ATEU

0.1002

0.1784

0.1459

0.1616

ATE

0.1020

0.2069

0.1978

0.2031

Sorting gain
(ATET-ATE)

____________0.0023

__________0.0316

________0.0657

________0.0507

aA test for essential heterogeneity in the treatment effects yielded an F-statistic (p value) of 18.19 (0.0000),
indicating self-selection arising from heterogeneous and unobserved gains for individuals in the sample (See
Heckman, Urzua and Vytlacil, 2006).
bThe extent of selection bias is gauged with a comparison of the OLS and
parametric model results: selection bias = OLS-ATET= 0.0359-0.1043= -0.0684. It shows that the OLS estimate of
the average effect of legalization on earnings is downward biased, indicating a 3.6% average earnings gain relative
to the 10% average gain suggested by the ATET estimate in the parametric method. The overall bias (OLS-ATE) is
-0.0661.

□ Untreated (D=0)   □ Treated (D=1)

Figure 1 Frequency of propensity score by legal status

26



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