1\According to analysis by the Federal Reserve Bank of St Louis, the median personal income per capita for immigrants in the US was $20,400 in 2015, versus $28,000 for natives.

a. What are some possible explanations for this gap in income?

b. You are interested in investigating whether the labor market discriminates against immigrants. You have decided to design an experiment for this purpose. i. Explain the study design in detail. ii. What data would you collect? iii. What analysis would you conduct? Write down the equations in detail. What would your model predict (in terms of the equation estimates) if there were discrimination?

c. Lets say you find evidence of discrimination in your experiment. Now you want to know the nature of the discrimination (statistical versus taste-based). How you would go about investigating this? What additional data would you need to collect in your experiment, and how would it allow you to tell apart the nature of discrimination? [For this section, assume you can also collect data from employers. If so, think about what kinds of data would be useful to collect.]