These interactions control for the possibility that immigrant
outcomes are more sensitive to the business cycle than those of natives (as well as net out
any potential correlation between the generosity variable, G, and the state unemployment
rate).16 Because the generosity dummy variable is set to one for states that did not replace
the lost federal benefits, the coefficient vector θ in Eq. (1) measures the impact of the federal
cutbacks on the relative trend in immigrant health coverage. In particular, it measures the
extent to which the pre- and post-PRWORA change in coverage differs between states that
were less generous and states that were more generous.