What’s the Economic Impact of a Pathway to Citizenship?

Michael Stephens | July 24, 2013

The Congressional Budget Office’s analyses of the Senate immigration bill were a boon (at least rhetorically) to those pushing for comprehensive immigration reform. The CBO estimated the bill would produce some significant budgetary savings and a macroeconomic boost, helping undermine the argument that comprehensive reform would prove too costly. However, the Senate bill contains some slightly more popular provisions — those related to increasing high-skill immigration — packaged together with some decidedly less popular provisions — like offering a pathway to legal immigration (and eventual citizenship) to currently undocumented immigrants. The latter seems to be the biggest obstacle to getting House Republicans on board with comprehensive reform.

So what happens when we look exclusively at the economic impact of something like the “pathway to citizenship”? Selçuk Eren, drawing on research he conducted with Hugo Benítez-Silva and Eva Cárceles-Poveda, provides the answer. Legalizing 50 percent of the undocumented population, far from being a massive burden, would actually add $36 billion per year to GDP. And these macroeconomic benefits would be large enough that there would be little perceptible net impact on the social insurance system (they examined Social Security and unemployment insurance in particular).

Now, in a roughly $14 trillion economy, adding $36 billion per year isn’t a huge deal (the Senate bill would involve more like 70 percent legalization, so the actual GDP boost would be larger, though not by much). But if you grant the humanitarian or republican arguments for a pathway to citizenship — that it’s a bad idea in a modern republic to maintain a semi-permanent underclass of individuals uniquely subject to the arbitrary will of others — or if you’re casting about for some politically correct reason to object to legalization, then the question becomes whether reform is too costly in economic terms. Eren’s research suggests that we can afford both the status quo and the Senate bill — even its most controversial provision — but the status quo is actually the more costly of the two.

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