Citizenship for America’s 11m undocumented immigrants would boost the economy

IMMIGRANTS LAID the foundations of America’s success as a country. About 45m people currently residing there, 14% of the population, were born overseas. About half of them have become naturalised citizens; one-quarter are lawful permanent residents with a path to citizenship; and about one-twentieth are temporary residents. The remainder, 11m or so “undocumented” immigrants that reside in the country illegally, wait in hope for a means of gaining a legitimate status.

Undocumented immigrants are winning new rights in certain areas, however. California recently announced a proposal to cover medical bills for those over 50 years old. And New Jersey and New York have launched schemes to provide economic relief for the undocumented. On June 26th Democrat lawmakers in Oregon went the furthest yet, by voting to expand health-care access to all undocumented immigrants living in the state. The bill’s sponsors argue that many of the recipients will be frontline workers that have suffered disproportionately during the pandemic. Republicans complain that such efforts are a fiscal burden.

Granting citizenship, however, remains the most controversial of all policy options. A recent analysis by Raúl Hinojosa-Ojeda and colleagues at the University of California, Los Angeles argues that it should not be. Legal recognition of undocumented immigrants would provide a big boost for America’s economy as many would begin paying taxes for the first time. The academics looked at four different future scenarios currently being considered by Congress.

The first, based on the US Citizenship Act of 2021, creates a path to citizenship for all 11m undocumented immigrants—about 8m of whom are in the labour market. Over the next ten years these workers would add nearly $1.5trn to America’s economy, about 0.5% of GDP. In turn this would generate tax revenues of $370bn and 370,000 jobs. The benefits could be higher still, because the bill would allow for immigration to increase.

The second scenario involves a more piecemeal approach where bills are introduced with a narrower focus. One ambitious one would create a path to citizenship for about 6m undocumented key or essential workers. In that scenario, the study’s projection of the bill’s economic contributions to GDP declines to $1.2trn and tax receipts fall to $300bn.

Two other bills propose granting citizenship to 400,000 immigrants who were brought as children—known as “Dreamers”—and to over 250,000 workers that have fled natural disasters and armed conflict who are living in America under a temporary protected status. In these final two scenarios the study’s projections of the economic benefits, although positive, fall substantially, to about $110bn and $60bn, respectively, over ten years.

In practice, most of these bills face an uncertain future in Congress. The US Citizenship Act of 2021 is by far the most ambitious, and its prospects do not look good. Congress has not managed to pass a comprehensive immigration-reform bill since 1986. According to GovTrack, a website, the Dreamers bill has by far the highest chance of passing, at just 29%.

That is because not everyone is keen on helping illegal immigrants. Republican lawmakers say that illegal immigrants exploit social benefits, diminish job prospects for native-born citizens and exacerbate violent crime in cities. Their claims are largely unsubstantiated. In truth, they pay roughly $12bn in local and state taxes each year, do not qualify for most social benefits and commit crimes at lower rates than American citizens. Model citizens indeed.