Putting undocumented immigrants on a pathway to citizenship would rise U.S. GDP by as much as $1.7 trillion over the next decade, raise wages for every Americans, and also create numerous thousands of new jobs, proceeding the country’s financial recovery.
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A candidate because that U.S. Citizenship stop a U.S. Flag during a naturalization ceremony for brand-new U.S. Citizen in Newark, brand-new Jersey, February 2017. (Getty/Robert Nickelsberg)
Today, 10.2 million undocumented immigrants room living and also working in communities across the joined States.1 on average, they have lived in this country for 16 years and also are parents, grandparents, and also siblings to another 10.2 million household members.2 at the exact same time, it has actually been virtually 40 years since Congress has actually meaningfully reformed the U.S. Immigration system, leaving a generation the individuals and also their family members vulnerable. Poll after poll has portrayed that the vast bulk of american support putting undocumented immigrants on a pathway to citizenship. And also as the country emerges native the COVID-19 pandemic and looks towards the future, legalization is a crucial component the a just, equitable, and robust recovery.3
To download descriptions and the modeled impacts connected with four scenarios the would placed undocumented immigrant on a pathway to legalization and citizenship, see the links below:
As the Biden management and conference craft their recovery legislation and also consider how finest to relocate the nation’s policies toward a much more fair, humane, and workable immigrant system, the center for American Progress and also the university of California, Davis’s worldwide Migration facility modeled the economic impacts of several proposals that are currently before Congress. Using an accumulation macro-growth simulation, the design illustrates the benefits to the whole country from placing undocumented immigrant on a pathway come citizenship. Such regulation would increase productivity and also wages—not just for those eligible for legalization, but for all American workers—create thousands of thousands of jobs, and increase taxation revenue.4
To help inform policymakers and advocates, this report look at at 4 potential scenarios wherein Congress sponsor a pathway to citizenship to: every undocumented immigrants; undocumented immigrants working in crucial occupations; Dreamers and those eligible because that Temporary safeguarded Status (TPS); and also a mix of Dreamers, those eligible for TPS, and also essential workers.5
The report finds that during the following decade:
Scenario 1: providing a pathway to citizenship for all undocumented immigrants in the United states would boost U.S. Gross domestic product (GDP) through a cumulative total of $1.7 sunshine over 10 years and also create 438,800 brand-new jobs.6Five years after implementation, those eligible would earn yearly wages that space $4,300 higher.
Scenario 2: providing a pathway come citizenship for undocumented immigrants that are important workers would an increase the GDP by a cumulative total of $989 billion end 10 years and also create 203,200 brand-new jobs.Five years after implementation, those eligible would certainly experience yearly wages that are $4,300 higher.Ten year after implementation, those annual wages would certainly be $11,800 higher, and all other American employees would watch their yearly wages increase by $300.
Scenario 3: it spreads widespread the American Dream and Promise act (H.R. 6) would increase U.S. GDP through a cumulative complete of $799 billion over 10 years and also create 285,400 new jobs.Five year after implementation, those eligible would certainly experience annual wages that are $4,300 higher.Ten year after implementation, those annual wages would be $16,800 higher, and all various other American workers would check out their yearly wages boost by $400.
Scenario 4: providing a pathway to citizenship because that H.R. 6-eligible and undocumented essential workers would rise the GDP through a cumulative full of $1.5 trillion over 10 years and also create 400,800 brand-new jobs.8Five years after implementation, those eligible would experience annual wages that are $4,300 higher.Ten years after implementation, those annual wages would be $13,500 higher, and all various other American employees would check out their annual wages rise by $600.
Importantly, this analysis considers only these straight economic benefits. The version does not capture the potentially big additional benefits to default immigrants’ kids in education, health, and also future efficiency gains, together these impacts would take location likely an ext than 10 years from implementation.
As the findings above show, producing a pathway to citizenship because that undocumented immigrants not only is the ideal thing to do but likewise would it is in a considerable stimulus come the U.S. Economy. Undocumented immigrant are an essential to the nation’s society infrastructure—a truth that has come to be even much more widely taken amid the coronavirus pandemic. Across the country, they are building families and starting businesses, castle are maintaining hospitals open and also functioning, and they are caring because that Americans’ loved ones. To that extent, legalization and also a pathway come citizenship—which would raise wages for every workers, create hundreds the thousands of new jobs, and boost the GDP—is an investment in the country’s infrastructure in and also of itself. As the united States proceeds to deal with the coronavirus pandemic and also works toward a just and also equitable recovery, conference must consider these proposals.
Undocumented immigrant are embedded in the unified States’ infrastructure
Undocumented immigrants have actually long been crucial to the nation’s financial growth and prosperity. Together the country battled the coronavirus pandemic and also economic fallout over the previous year, the role of undocumented immigrant in ensuring the well-being and safety of all Americans formed part of the national conversation surrounding necessary work. Nearly 3 in 4 undocumented people in the workforce—an approximated 5 million—are vital workers.9 At an excellent risk come themselves and their families, these individuals keep food it is provided chains running; treatment for patient in hospitals and also support clinical systems; preserve the country’s roads and buildings; provide critical care and services for children and also the elderly; and also educate future generations that Americans. All are an important members that the person infrastructure that powers the country each day.
Despite play a pivotal duty in keeping the country functioning, undocumented immigrants are among the neighborhoods hardest fight by COVID-19 and also have to be continually excluded native past financial recovery efforts and help programs, every while life under the daily threat that deportation.10 The reality is that the United claims will not rebuild an economy that works for all till it establish the methods undocumented immigrants have contributed to the country’s success, and economic recovery law considers the demands of the undocumented community. Together this report details, legalization and a pathway to citizenship would provide the crucial relief and security because that undocumented families and also would lug a much-needed rise to the U.S. Economy.
In stimulate to version the economic effects of legalization and a pathway to citizenship for undocumented immigrants, one must first identify that would be eligible. Utilizing the 2019 and 2020 Current population Survey’s (CPS) yearly Social and Economic supplement (ASEC) performed by the U.S. Census Bureau, the authors identified 10.2 million undocumented immigrants living in the joined States. Making use of an typical of these 2 years of data enabled the authors to establish a picture of the undocumented labor force both before and at the beginning of the pandemic, offering a much more realistic snapshot of the undocumented labor force as the country recovers.
Once the authors created the default population, they considered the previous literature on the economic impacts the legalization and also citizenship because that undocumented immigrants on a organize of different inputs. The authors based calculations top top a model of economic growth v documented and undocumented workers; human funding depending on labor effectiveness and schooling; and also total variable productivity, which counts positively on average human capital.11 they include:
For much more details, see the methodological appendix.
Using the conditions described above, the model simulates the impacts that legalization and naturalization would have on 4 segments the the undocumented adult population. Together policies an outcome in permanent alters in labor effectiveness, productivity, and also capital investments that space evaluated in a design of one economy growing in a well balanced trajectory. The model contains estimates that the impact on median wages of eligible workers, mean wages that all various other workers, GDP, and number of permanent new jobs using—as base measure of employment—an median of the 2019 and also 2020 CPS ASEC.
These results are approximated for two time frames: the short- come medium-term run (the first five year after implementation) and also the irreversible run (five come 10 year after implementation).Short- come medium-run effects
Short-run impacts derive largely from boosted productivity of legalized workers. These individuals have the right to move to higher-paying jobs, boost the effectiveness and also productivity of their skills, and are less constrained in project searches and also opportunities. At the same time, their increased income and spending leads to enterprise in their communities being much more willing to invest and to take advantage of increased purchasing strength that raises return to investments. This generates boosted consumption and also demand and greater returns come investment, and also it leader to additional investment and also production capacity.Long-run effects
Additional impacts need come be taken into consideration in the much longer run the these policy implementations. Top top this time horizon, younger undocumented immigrants check out their additional schooling analyze to greater wages and also productivity, specifically as one of the ways through i beg your pardon Dreamers deserve to pursue citizenship is through attaining additional education or degrees. These educational breakthroughs generate higher efficiency and fostering of much better technology and innovation. Other legalized employees are most likely to enhance their on-the-jobs skills, including their language abilities. In enhancement to this gains, naturalization, i beg your pardon is most likely to take place in this five- to 10-year window, leader to additional gains, access to an ext jobs, and added wage gains.15
This increased human resources in turn boosts productivity at developed businesses and also in neighborhood economies. That will likewise stimulate invest in new businesses and increase productivity and wages of various other workers and also generate permanent brand-new jobs.
Scenario 1: every undocumented immigrantsWho is eligible in this scenario?
Under this scenario, every undocumented immigrants would certainly be default for instant legalization and a five-year route toward naturalization. The model consists of all undocumented workers together with Dreamers, regardless of job-related status. The authors calculation that 7.7 million the the 10.2 million undocumented individuals eligible for protection using 2019–2020 CPS data to be either work in the year before the COVID-19 situation or were Dreamers.16
Short-run effects (implementation to year five):
Long-run impacts (year 5 to year 10):Increase in yearly wages the undocumented workers: $14,000 (32.4 percent)Increase in yearly wages that all various other workers: $700 (1.1 percent)
Total accumulation GDP boost through the decade: $1.7 trillion
Total number of new jobs created: 438,800Scenario 2: Undocumented immigrants working in necessary rolesWho is eligible in this scenario?
Under this scenario, every undocumented immigrants functioning in necessary jobs, as characterized by the U.S. Room of Homeland security (DHS), would be eligible come legalize immediately and access a pathway come citizenship after 5 years.18 The authors calculation that 5 million undocumented people are default for protection using 2019–2020 CPS data.
Short-run results (implementation to year five):Increase in annual wages of undocumented workers: $4,300 (10 percent)
Long-run impacts (year 5 to year 10):Increase in annual wages of undocumented workers: $11,800 (27.3 percent)Increase in annual wages the all various other workers: $300 (0.5 percent)
Total cumulative GDP rise through the decade: $989 billion
Total number of brand-new jobs created: 203,200Scenario 3: Undocumented immigrant eligible because that the American Dream and Promise ActWho is default under this scenario?
Undocumented immigrants are considered eligible for a conditional permanent resident status under the Dream provisions that the law if they arrived in the unified States prior to 2021 at the period of 18 or younger and also have a high college diploma or are enrolled in high school. They are eligible for permanent residency after ~ completing any type of of the following three criteria: 2 years of examine toward an advanced degree or technological training; two years of armed forces service; or 3 years of employment, 75 percent that which have to be performed while job-related authorized.19 The authors calculation that 2 million undocumented individuals are standard for security using 2019–2020 CPS data.
Undocumented immigrants are taken into consideration eligible under the Promise provisions that the law if they to be eligible for either TPS together of September 2017 or Deferred applied Departure together of January 2021.20
Short-run results (implementation come year five):Increase in annual wages of undocumented workers: $4,300 (10 percent)
Long-run effects (year five to year 10):Increase in yearly wages the undocumented workers: $16,800 (38.9 percent)Increase in yearly wages of all various other workers: $400 (0.7 percent)
Total cumulative GDP growth through the decade: $799 billion
Total number of brand-new jobs created: 285,400Scenario 4: Undocumented immigrant who space either crucial workers or eligible for the American Dream and also Promise ActWho is default under this scenario?
Undocumented immigrants who were one of two people employed as necessary workers or eligible for the American Dream and also Promise Act are eligible because that legalization and a pathway to citizenship. Undocumented immigrant are taken into consideration eligible for a conditional irreversible resident standing under the Dream provisions that the legislation if they arrived in the united States before 2021 at the age of 18 or younger and have a high institution diploma or space enrolled in high school. They are eligible for permanent residency after completing any kind of of the complying with three criteria: two years of examine toward an advanced degree or technical training; 2 years of army service; or 3 years that employment, 75 percent the which should be carry out while job-related authorized. Undocumented immigrant are considered eligible under the Promise provisions the the legislation if they were eligible for either TPS as of September 2017 or Deferred enforced Departure together of January 2021.21 The authors calculation that 6 million undocumented individuals are eligible for defense using 2019–2020 CPS data.22
Short-run effects (implementation come year five):Increase in yearly wages the undocumented workers: $4,300 (10 percent)
Long-run results (year 5 to year 10):Increase in annual wages of undocumented workers: $13,500 (31.3 percent)Increase in yearly wages the all other workers: $600 (1 percent)
Total cumulative GDP development through the decade: $1.5 trillion
Total number of new jobs created: 400,800
Giovanni Peri is a professor of economics at the university of California, Davis; the manager of the university’s global Migration Center, a multidisciplinary research facility focused top top migrations; and also a study associate in ~ the national Bureau of financial Research in Cambridge, Massachusetts. His research focuses on the economic components and after-effects of global migrations. Peri has actually published extensively in academic journals and has received grants from the MacArthur Foundation, the Russel Sage Foundation, the human being Bank, and the national Science Foundation. His research study is often featured in media outlets such as The Economist, The new York Times, The wall surface Street Journal, and NPR.
Reem Zaiour is a Ph.D. Student in the department of economics at the university of California, Davis, and a graduate college student affiliate in the university’s an international Migration Center. Her research study interests lie in ~ the intersection that migration, labor, and public economics.
Measuring the undocumented immigrant community
While undocumented people are no explicitly identified in U.S. Census office surveys, researchers have developed methodologies to recognize likely undocumented immigrant in this datasets. This evaluation uses one such method applied to CPS data.23
Among adult in the unified States, undocumented immigrants stand for 3.8 percent of the total population but 4.4 percent of the employed, working-age population. Your employment rates, mean age, and also average level of schooling indicate that they are more likely to work-related in lower-wage work than other immigrants or U.S.-born workers.
Undocumented immigrants space slightly an ext likely to it is in employed in jobs figured out as part of the DHS’ vital infrastructure.24 countless occupations in the food supply chain and also several in construction, transportation, and also logistics have actually very large shares the undocumented workers, indicating the those critical sectors rely greatly on them.
For more detailed review statistics comparing qualities of the adult U.S.-born population, recorded immigrants, and also undocumented immigrants, watch Table 1 in the technical appendix.How execute these approximates differ from various other CAP analyses?
Using the CPS-based methodology arisen by financial experts George Borjas and Hugh Cassidy, the authors’ evaluation estimates the undocumented adult populace to it is in 9.5 million, or 10.2 million in total, consisting of undocumented children, on average between 2019 and 2020.25 The facility for American Progress estimates the undocumented adult population to it is in 9.4 million, or 10.4 million in total, consisting of undocumented children, in 2018 and also 2019 based upon pooled American ar Survey data.26 These little differences room due to different methodologies that depend on similar, yet ultimately distinct, assumptions to estimate undocumented immigrants from two surveys.How has actually the coronavirus pandemic impacted the employment price of undocumented immigrants?
Researchers have discovered that undocumented immigrants, specifically undocumented men, have actually a really high propensity to work and are overrepresented in necessary occupations. However, v high levels of employment in an ext precarious and lower-paying jobs, they deserve to be an ext vulnerable come an financial slowdown and recession. Research study on undocumented immigrants throughout previous durations of financial peril, consisting of the good Recession, supports this, particularly for undocumented immigrants with lower levels of educational attainment and also for undocumented immigrants from Mexico.27
Unfortunately, the picture looked comparable for undocumented immigrant in 2020. The coronavirus pandemic and also ensuing economic dilemm confirmed together volatility. Likely because of the precarious and also less defended nature of their employment, the undocumented were amongst the very first workers to lose their jobs when states started stay-at-home efforts to save the pandemic.
Figure 1 reflects the employment rate of the U.S.-born population, recorded immigrants, and undocumented immigrants, as well as the total populace from January 2019 v December 2020. The data are indexed come December 2019—just prior to the effects of the coronavirus would show up in the workforce. For all teams of workers, the employment rate is reasonably steady though February 2020. Every three teams experienced sharp declines start in march 2020, through undocumented immigrants enduring the most severe drops. In between December 2019 and April 2020, the employment-to-population ratio for undocumented immigrants dropped by 16 percent, contrasted with 13 percent because that the U.S.-born populace and documented immigrants.
Though millions in the unified States remain unemployed and the employed rate proceeds to be well listed below that that December 2019, to an extent, it has recovered since April 2020. Simply as is true because that the U.S.-born population, undocumented immigrants have experienced a sizable rebound in employment—likely since their revenue depends completely on jobs, and also they went back to in-person occupational as quickly as the opportunity arose. Together of December 2020, the employment rate for both undocumented immigrants and also the U.S.-born populace was 4 percent below that of the December 2019 benchmark.Measuring the impact of legalization and also citizenship top top wages and also human capital
A crucial component that estimating the economic outcomes that result from putting undocumented immigrant on a pathway come legal status or citizenship is assessing the influence in 2 areas: your wages and also education attainment or specialized on-the-job training and skills.Wages
The affect of legalization and citizenship on the wages and productivity that undocumented workers has been studied extensively in the field, particularly after the immigration Reform and Control action of 1986 (IRCA)—the last major overhaul the the U.S. Immigration mechanism that put 2.7 million undocumented immigrants on a route toward citizenship v a general legalization and also the Special farming Worker program.28 Researchers estimate that those who sought legal standing under IRCA proficient a 20 percent rise in their yearly wages.29 This research was likewise used as a basis for efforts to predict the effects of miscellaneous iterations of the Dream Act, with a agreement landing somewhere between a 20 percent come 25 percent wage bump because that those eligible.30
That said, the economy and U.S. Labor sector look really different more than 30 year later, and the most recent financial research find the wage increase—through estimating the inverse, the fairy penalty for undocumented workers compared with others—to be about 5 percent, substantially lower than the IRCA-related increase.31
The authors supplied a Mincerian regression, one in which separation, personal, instance (log) wages room regressed on a large set of control variables to calculation this wage penalty top top data indigenous the 2019 and 2020 CPS. This method allows for researcher to regulate for particular characteristics.32 Generally, the fairy difference in between documented and also undocumented workers is much greater when measure up in raw values, but when regulating for qualities such together educational attainment, year of immigration, and country that birth, the distinction attributable to different legal status is lot smaller. (for details, see tables 4 and also 5) The outcome—a gap of 4 percent when comparing undocumented male workers with all others—is in line with the current prevailing study on the wage penalty the undocumented immigrant face.33
The largest contributor to the wage penalty for undocumented immigrant is productivity or performance differences—mostly the undocumented employees have restricted access come certain varieties of jobs and tasks that are considered, in the financial sense, an ext productive.34
Given this broad range, then, what is the best wage boost rate to incorporate in a design projecting the services of legalization because that undocumented immigrants? informed by both the timeless IRCA-based estimates and also the much more recent evaluation of the penalty, this evaluation uses a 10 percent wage increase, i beg your pardon is an median of those estimates, together a an outcome of legalization.
However, many legislative propose go past legalizing undocumented workers and instead push for putting undocumented immigrant on a pathway to citizenship. Citizenship has additional boosts top top the efficiency and also productivity of employees that go past those connected with legalization. Researchers calculation there is secondary 5 percent rise in incomes resulting native citizenship due to an individual’s access to a larger selection of better-paid jobs.35
This simulation suspect a 100 percent takeup price of the eligible people for legalization and naturalization. In this sense, the simulation mirrors the complete potential of such a program, if every those eligible seek it.Educational attainment or on-the-job learning
Another impact that must be considered is the additional postsecondary schooling the undocumented immigrants, namely young undocumented immigrants, would obtain as a result of the incentives from legalization. Research on legalization, together with Deferred activity for Childhood arrivals (DACA), mirrors that together policies have a positive influence on educational attainment.36
This version considers extr investments in education that undocumented immigrants would certainly make within the an initial 10 year of legalization, generating financial returns come their human being capital over and beyond the boosted wages and also productivity. The model has provisions that all undocumented immigrants who space younger than 30 and still enrolled in institution will finish two extr years the schooling, on average, after legalization and before naturalization. Following the literature, the model assumes that the their additional schooling will have a positive impact on the performance of other workers. This will boost by 10 percent because that one extra year of median postsecondary schooling amongst the employed.37
Aside indigenous education, legalization and a pathway come citizenship would an outcome in an ext on-the-job learning, particularly in regards to language, and also ultimately boost in efficiency. Research approximates that reduced levels that English proficiency amongst undocumented immigrants result in wages that are 5 percent lower compared with those of recorded immigrants.38 This model consists of provisions the assume in the long-run approximates (five to 10 year after enactment), undocumented employees will see gains in efficiency, on-the-job learning, and also language proficiency, every one of which boost their productivity.Model components
Calculations are based on a version of economic growth through documented and also undocumented workers, where human capital depends on labor effectiveness and schooling, and also total element productivity depends on schooling because of a hopeful externality. This is based on chapters 4 and also 5 of Charles I. Jones and Dietrich Vollrath’s Introduction to financial Growth: 3rd Edition. The design assumes one efficiency effect of legalization the 10 percent, constant with an mean wage penalty derived by combining the authors’ calculation for undocumented workers in the 2019 and also 2020 CPS ASEC; the approximates by George J. Borjas and Hugh Cassidy in their write-up “The fairy penalty come undocumented immigration”; and earlier estimates of the influence of IRCA.39 The model has the confident externality of schooling as measured through Susana Iranzo and Giovanni Peri in their article “Schooling Externalities, Technology, and Productivity: Theory and Evidence from U.S. States” and also returns come postsecondary schooling as share the labor revenue in GDP same to 0.54, as estimated by David Autor, Claudia Goldin, and also Lawrence F. Katz in their short article “Extending the Race between Education and Technology.”40 The short run considers only the boosted labor efficiency for legalized workers and the solution of business investments. The lengthy run also includes the extr schooling effect, the on-the-job skills effects, the positive schooling externality, and also the response of company investments.
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This model assumes the the response of investment is on one equilibrium path, as in a design of financial growth v human and also physical funding and technological change, as in Jones and Vollrath’s 2013 book, wherein the country grows at a consistent rate and also businesses answers to higher rates of returns to capital by investing and also maintaining the ratio of physical capital to reliable labor proportional come the efficiency level.41 this mechanisms interpret to greater GDP and greater investment and business income for U.S.-born and also other documented individuals in the quick run. The wage earnings of American workers will not adjust in the short run, and also total wage income will only rise due to higher wages that the legalized immigrants.
As average productivity increases, there will certainly be higher demand because that labor, assuming an increase sloping job supply for the team of various other American workers and also an elasticity the supply roughly 0.27; the revolutionary will likewise generate new, permanent jobs.42
For a full contents of the expansion model, please view the “Macro-Growth design To calculate the effects of Legalization.”43