approximately 12,000-13,000 vatu higher, relative to a baseline of 65,000 vatu, and the effect on log expenditure is equivalent to approximately a 28 percent increase. Panel B of the table also shows positive and significant effects using the duration of time in the RSE as the dependent variable.

The fixed effects results also give large point estimates, although smaller in magnitude than the difference-in-difference estimates, and less significant. Nonetheless, the results on the PS-1 and PS-2 screened samples still show significant increases in both logs and levels of per capita income and consumption when using the duration in the RSE, and significant impacts on percapita income and log per capita consumption using the measure of ever in the RSE. One potential reason for the smaller coefficients with fixed effects is attenuation bias due to measurement error. The Vanuatu data is considerably noisier than the Tongan data. For example, the baseline coefficient of variation of per capita income for the RSE households is 0.90 in Tonga compared to 1.40 in Vanuatu, while the correlation in per capita income from one wave to the next for the non-RSE households varies from 0.43 to 0.77 in Tonga, compared to between 0.19 and 0.27 in Vanuatu. There is thus more signal relative to noise in the Tongan data than in the Vanuatu data.

A final point to note on Tables 2 and 3 is that the estimates are reasonably robust to the choice of sample, with the estimated effects not changing dramatically as one moves from the full sample to the PS-1 and PS-2 screened samples. Given this robustness to different control samples and to controlling for individual fixed effects, and given the large magnitudes of the effects estimated, we believe these estimates of the causal effect of the RSE are convincing and unlikely to be driven by unobserved self-selection.

The median after-tax income earned in New Zealand reported by the seasonal migrants is approximately NZ$12,000.<sup>13</sup> This is several multiples of the mean annual household income per capita of RSE households at baseline, which was approximately NZ$1400 in Tonga and NZ$2500 in Vanuatu. Despite the large increase in income from the RSE, one might then ask why the increase in per capita incomes is “only” 35 percent. First, workers face costs in New Zealand, both from living expenses (including rent and health insurance) and from repayment of their share of the airfare. Out of the NZ$12,000 in income, the average worker remitted or brought back with them an average of NZ$5,500. This amount was similar in Tonga and Vanuatu, the difference being that in Tonga about half was in the form of remittances and half as repatriated savings, whereas in Vanuatu only 10 percent was in the form of remittances and 90 percent as repatriated savings. Second, when we consider per capita income, this amount is divided by 5.7 in Tonga and 4.7 in Vanuatu. Third, we are looking at average impacts over 2 years, so since just over half the households sent a worker in one year only, the per capita per year effect for these households has to be divided by two. Finally, households also lose both the

> 13 This number accords well with what migrants should have been earning given prevailing wage rates in the sector.

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