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Economics of Immigration

Adding it Up: Accurately Gauging the Economic Impact of Immigration Reform

by Raul Hinojosa Ojeda, Ph.D. and Sherman Robinson, Ph.D.

With immigration reform legislation now making its way through Congress, it is imperative that we estimate as accurately as possible the full range of potential economic costs and benefits associated with any particular bill. It is especially important to establish the proper criteria for a complete, robust, and accurate fiscal scoring of any bill by the Congressional Budget Office (CBO). To that end, we should consider the growing consensus of the economic literature on the strongly positive benefits of immigration in general and of the various aspects of immigration reform in particular, as calculated using a variety of different methodologies. The CBO would be well-advised to keep this consensus literature in mind as it establishes the criteria it will use for scoring immigration reform legislation.

More and more research demonstrates the economic benefits of immigration reform.

The last few years have witnessed a burst in economic research showing the strongly positive net impacts of immigration in general and comprehensive immigration reform (CIR) in particular. Broad agreement has emerged as to not only the net economic and fiscal benefits of immigration and CIR, but the acceleration of those benefits over time. Moreover, these conclusions have been arrived at in studies utilizing a variety of different methodological approaches. It is important to point out that each of these different approaches is limited by a focus on separate aspects of immigration reform (Table 1). A complete methodological framework accounting for all of the components of CIR produces the largest-scale benefits.Read more...

Published On: Tue, May 07, 2013 | Download File

An Immigration Stimulus: The Economic Benefits of a Legalization Program

As the legislative debate over immigration reform heats up, a central point of contention will be whether or not to create a pathway to legal status for all or most of the 11 million unauthorized immigrants now living in the United States. In evaluating the pros and cons of a legalization program, it is important to keep in mind that legalization is not only a humanitarian act; it is also a form of economic stimulus. The example of the 1986 Immigration Reform and Control Act (IRCA) demonstrates that workers with legal status earn more than workers who are unauthorized. And these extra earnings generate more tax revenue for federal, state, and local governments, as well as more consumer spending which sustains more jobs in U.S. businesses. Recent studies suggest that the economic value of a new legalization program would be substantial, amounting to tens of billions of dollars in added income, billions of dollars in additional tax revenue, and hundreds of thousands of new jobs for native-born and immigrant workers alike. In short, a new legalization program for unauthorized immigrants would benefit everyone by growing the economy and expanding the labor market.

The experience of IRCA demonstrates that legalization allows previously unauthorized workers to earn higher wages and get better jobs.Read more...

Published On: Tue, Apr 09, 2013 | Download File

The Advantages of Family-Based Immigration

Since the enactment of the Immigration and Nationality Act in 1965, legal immigration to the United States has been based primarily on the family ties or the work skills of prospective immigrants. Under the provisions of current immigration law, the family-based immigration category allows U.S. citizens and lawful permanent residents (LPRs), or “green card” holders, to bring certain family members to the United States. There are 480,000 family-based visas available every year. Family-based immigrants are admitted to the U.S. either as immediate relatives of U.S. citizens or through the family preference system.

The contributions of family-based immigrants to the U.S. economy, local communities, and the national fabric are manifold. They account for a significant portion of domestic economic growth, contribute to the well-being of the current and future labor force, play a key role in business development and community improvement, and are among the most upwardly mobile segments of the labor force. This fact sheet provides an overview of the economic and social advantages associated with family-based immigration. In particular, it highlights the direct benefits resulting from the participation of family-based immigrants in the labor force, their contributions to the community, and the key—yet often underestimated—value of the unpaid care work provided by immigrant women.

1.     Families are crucial to the social and economic incorporation of newcomers.Read more...

Published On: Thu, Mar 14, 2013 | Download File

AIC Executive Director Ben Johnson's Testimony Before the House Judiciary Committee

Mr. Chairman and members of the committee, thank you for the opportunity to appear before you today and provide testimony on behalf of the American Immigration Council. The American Immigration Council is a non-profit educational foundation which for 25 years has been dedicated to increasing public understanding of immigration law and policy and the role of immigration in American society.

Today’s hearing on “Enhancing American Competitiveness through Skilled Immigration” provides an opportunity to engage in a thoughtful conversation about the role that immigration can and should play in building a 21st century America that prospers and grows. Prosperity is a shared goal that unites us all, and offers an important lens through which to evaluate the vital role immigration plays in our economy today, as well as the necessity of retooling our outdated and hopelessly broken immigration system. As we do so, however, it is critical for us to recognize that skilled immigration encompasses a wide range of individuals with very different educational and occupational backgrounds. Moreover, the talent we seek very often comes to these shores not only through employment-based channels of immigration, but through family reunification, the admission of refugees and asylees, and can even be found within the current population of unauthorized workers.Read more...

Published On: Tue, Mar 05, 2013 | Download File

Always in Demand: The Economic Contributions of Immigrant Scientists and Engineers

With the U.S. economy in the midst of a prolonged slump, it’s hard to believe that any industry would actually benefit from having more workers. But that is precisely the case when it comes to those industries which depend upon highly skilled scientists and engineers. The United States has long faced a dilemma in this respect: the U.S. economy is capable of absorbing more high-tech professionals than the U.S. educational system produces. That is one reason so many U.S. scientists and engineers are immigrants. In “STEM” occupations (science, technology, engineering, and mathematics), the foreign-born account for 26.1 percent of workers with PhDs and 17.7 percent of those with master’s degrees. Even more U.S. scientists and engineers would be immigrants if not for the arbitrary limits imposed by the U.S. immigration system, particularly the inadequate supply of green cards and H-1B visas. Given that STEM professionals tend to create jobs through their innovative work, such limits are economically self-defeating.

Immigrant scientists and engineers create new jobs.Read more...

Published On: Mon, Mar 04, 2013 | Download File

A Bipartisan Bridge to Prosperity: High-Skilled Immigration Legislation in the 113th Congress

In the spirit of bipartisan immigration reform, a geographically diverse contingent from both chambers of Congress have introduced legislation to strengthen high-skilled immigration and spur economic growth by recruiting and retaining entrepreneurial talent. Research is clear that high-skilled immigrants and immigrant entrepreneurs are a source of strength for America’s economy and innovative competitiveness. Currently, the most common routes for high-skilled immigrants and immigrant entrepreneurs to come to the U.S. include: H-1B visas for “specialty occupations” (which most commonly refers to occupations requiring “the theoretical and practical application of a body of highly specialized knowledge and a bachelor’s or higher degree”), L-1 visas for “intracompany transferees,” O-1A visas for individuals with “sustained national or international acclaim” in the sciences, arts, education, business, or athletics, and E-2 visas for treaty investors, which are available to citizens of countries with treaties of commerce and navigation with the U.S. The three new pieces of legislation include the Immigration Innovation Act of 2013, the StartUp Visa Act of 2013, and the Startup Act 3.0.

Immigration Innovation Act of 2013Read more...

Published On: Mon, Mar 04, 2013 | Download File

Economic Progress via Legalization: Lessons from the Last Legalization Program

By Rob Paral

The data analyzed in IPC's latest Special Report, Economic Progress via Legalization, indicates that unauthorized immigrants who gained legal status in the 1980s through the legalization provisions of the Immigration Reform and Control Act (IRCA) experienced clear improvement in their socioeconomic situation.  Between 1990 and 2006, the educational attainment of IRCA immigrants increased substantially, their poverty rates fell dramatically, and their home ownership rates improved tremendously.  Moreover, their real wages rose, many of them moved into managerial positions, and the vast majority did not depend upon public assistance. The findings presented in this report support the notion that legalization of unauthorized immigrants can play a role in promoting economic growth and lessening socioeconomic disparities.  Reforming our immigration system is not an obstacle to getting our economy back on track—it is part of the solution.

Originally Published Nov. 5, 2009

Published On: Thu, Jan 31, 2013 | Download File

Back to the Future: The Impact of Legalization Then and Now

While there are many facets to an intelligent immigration reform package, one thing is clear: legalization for undocumented immigrants helps all of us.  Most economists recognize that legalization has worked in the past.  After a significant percentage of the undocumented population legalized under the Immigration Reform and Control Act of 1986 (IRCA), information on IRCA applicants was used to assess the legislation’s impact.  My own research has shown that IRCA provided immediate direct benefits by successfully turning formerly clandestine workers into higher-paid employees. Other researchers have shown that IRCA provided unexpected indirect benefits to the communities where legalized immigrants resided.  After legalization, fewer of these immigrants sent money back to their home countries, and those who sent back money sent back less.  More of their earnings were spent in their communities in the United States.  Research also showed that the legalized population became participating community members—nearly two out of five people who legalized under IRCA were U.S. citizens by 2001.

What we learned from IRCA gives us a bird’s eye view into what we can expect to happen with a new legalization program. By examining three areas of concern: work, family, and community, we can see what economic and social benefits would be derived from a legalization program in 2013.

By Sherrie A. Kossoudji, Ph.D.

Published On: Thu, Jan 31, 2013 | Download File

Strength in Diversity: The Economic and Political Power of Immigrants, Latinos, and Asians

US ThumbThe Political and Economic Power of Immigrants, Latinos, and Asians in the United States (Updated May 2014)

Download the 2013 Infographic (2010 Version)

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Published On: Sat, Jan 19, 2013 | Download File

New Americans in Kansas

Kansas ThumbThe Political and Economic Power of Immigrants, Latinos, and Asians in the Sunflower State (Updated May 2014)

Download the 2013 Infographic (2010 Version)

Download the Fact Sheet (Updated 2014)

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Published On: Tue, Jan 01, 2013 | Download File