Analysis: What Is the Economic Impact of Immigration Reform?

To find out how the wage gains would affect the GDP, Hinojosa-Ojeda used an economic model called a computable general equilibrium model -- essentially a super calculator. This program incorporates 20,000 to 30,000 equations and is also used by the U.S. government to determine figures like the potential impact of tax revenue.

These types of programs can cost hundreds of thousands of dollars to develop: "This is for when you absolutely have to have the best results," Hinojosa-Ojeda said. While the tool is high power, what's more important is the data that you put in.

Hinojosa-Ojeda chose to use data from the last mass legalization program, which showed big wage increases. He also made the assumption that a better functioning immigration system would allow new immigrant workers to start at a higher salary. That all translates to big GDP gains over 10 years.

Verdict: Economists generally agree that a path to legalization would have a positive economic impact, but putting an exact dollar amount on that impact requires making some assumptions along the way. If the assumptions Hinojosa-Ojeda has made about the effects of reform hold true, the projection should be roughly on target.

2. "Immigrant Legalization: Assessing the Labor Market Effects" by Laura E. Hill / Magnus Lofstrom / Joseph M. Hayes, Public Policy Institute of California

Summary: Legalizing undocumented immigrants will not lead to dramatic changes in the labor market, either for unauthorized immigrants or for native workers.

This report focuses on immigrants who are in the process of going from from undocumented to becoming permanent residents, ie, green card holders. Then it asks if occupational mobility and wages grow at a greater rate for these new permanent residents than for immigrants who legally entered the country.

The report finds that overall gains in wage growth and occupational mobility after legalization would likely be small.

There's a problem with this approach, according to Hinojosa-Ojeda. A mass legalization program has a greater impact on wages and the labor market than simply gaining legal residency through avenues that are already available. "The only study on the actual movement from undocumented status to legalization [by the U.S. Department of Labor] shows much bigger impact," he wrote in an email.

In addition, this report looks at workers who are already on the path to becoming legal permanent residents -- something that's difficult to achieve for the average undocumented person. "You can only get that under very extraordinary circumstances," says Hinojosa-Ojeda. "So these are extraordinary workers." In other words, the report isn't looking at typical undocumented workers.

This report also studies a smaller period of time. While the Hinojosa-Ojeda report uses a minimum of three years worth of data from 1988 to 1991, the interviews here only span 4 to 13 months from when the subject gains residency. The researchers didn't choose that on purpose, it was the only recent data available aside from the 1986 amnesty figures, and they wanted to look at a time period closer to present day. "It's possible that things could change if we had a longer window," Hill says.

Page
  • 1
  • |
  • 2
  • |
  • 3
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
You Might Also Like...