The resolution to this conflicting evidence lies in the fact that the affected immigrants responded
to the welfare cutbacks. The immigrants most likely to be adversely affected by the new restrictions significantly increased their labor supply, thereby raising their probability
of being covered by employer-sponsored insurance. In fact, this increase in the probability
of coverage through employer-sponsored insurance was large enough to completely offset
the Medicaid cutbacks. The empirical analysis, therefore, provides strong evidence of a
sizable crowdout effect of publicly provided health insurance among immigrants. In an
important sense, the state programs were unnecessary. In the absence of these programs,
the targeted immigrants themselves would have taken actions to reduce the probability that
they would be left without health insurance coverage