The Economics of Immigration Enforcement

by Edwin S. Rubinstein

Research from
The National Policy Institute
All NPI publications can be found at:
http://www.nationalpolicyinstitute.org/publications

December 2005: Issue Number 101

Synopsis

In July 2005, the Center for American Progress published a report assessing the costs of arresting, detaining, prosecuting, and deporting illegal aliens. The study, Deporting the Undocumented: A Cost Assessment, estimated that the total cost of mass deportation would be between $206 and $230 billion over five years or an average cost of between $41 and $46 billion annually over a five year period. The following paper reviews the data on mass deportation. In reassessing the cost, the following analysis compares and contrasts what an amnesty would cost taxpayers in terms of social services, lost wages, health care subsidies, and educational expenditures. The author concludes that comparative estimates demonstrate “no matter how high the costs of deporting illegal aliens may seem, the costs of not deporting them are larger still.”

A July 2005 study questions whether deporting illegal immigrants would be worth the costs. Deporting the Undocumented: A Cost Assessment is published by the Center for American Progress, a liberal think-tank. Its authors claim the study is the first-ever estimate of costs associated with arresting, detaining, prosecuting, and removing immigrants who have entered the United States illegally or overstayed their visas.

The cost of mass deportation?: $206 to $230 billion over five-years, depending on how many illegals leave voluntarily. That’s an average cost of $41 billion to $46 billion per year for five years. About 10 million illegals would be subject to deportation, according to the study.

Advocates for tougher immigration laws say the estimates are too high. Mark Krikorian of the Center for Immigration Studies argues, for example, that as many as 50 percent of illegals would leave voluntarily if the government were to initiate an aggressive deportation policy. By contrast, the study assumes only 10 to 20 percent would leave voluntarily.

Rep. Tom Tancredo (R.–CO) called the study “an interesting intellectual exercise” that is “useless…because no one’s talking about” mass deportation. Rather than deport individuals he would impose fines and impose sanctions on employers who employ illegals—something the government has stubbornly refused to do.

We believe that neither the pro- nor the anti-immigration groups are asking the right questions. Neither side has assessed the costs of maintaining the status quo, i.e., the annual costs of an immigration policy that refuses to either stem the influx of illegal aliens or deport illegals already here.

Illegal aliens are poorer than natives. They are eligible for welfare, medical assistance, and housing subsidies. Like all people, they enroll their children in school, drive on roads, and require police, fire, and sanitation services. They are also more likely to be incarcerated.

They also pay taxes. Even when working “off the books” illegal immigrants can’t avoid paying excise, sales and other taxes. So the fact that they receive public benefits does not necessarily mean they are a net drain.

Unfortunately, every study of the fiscal impact of immigration finds that the public expenditures attributable to illegal immigrants exceed their tax payments by a wide margin.

In addition there are indirect economic costs. Illegal immigrants reduce the incomes and employment opportunities of U.S.-born workers. Since the 1986 amnesty illegal aliens have become the largest contributor to U.S. labor force growth. Immigrant inflows—about one-third to one-half of which are comprised of illegal immigrants—accounted for almost half of U.S. labor force growth in recent years, and even more in certain areas and industries.

About 15 percent of U.S. workers were foreign born in 2004, up from 10 percent in 1990. Exactly how much of a reduction this has had on incomes of U.S. born workers cannot be known with certainty. A study by Harvard University Professor George Borjas concludes, however, that every 10 percent increase in the
U.S. labor force due to immigration reduces wages of native workers by about 3.5 percent. If Borjas is right, the income lost by displaced native born workers is enormous and growing rapidly.

In this paper we will show that, no matter how high the costs of deporting illegal aliens may seem, the costs of not deporting them are larger still.

Illegals Hurt Government Finances

Illegal aliens receive more than $26.3 billion in federal services while paying only $16 billion in federal taxes, creating a net fiscal deficit of about $10.3 billion. The figures for 2002 are from a report published by the Center for Immigration Studies in 2004. These are conservative estimates…

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