When illegal workers use false documents to get a job in the U.S., their employers may complete the paperwork by deducting Social Security, federal, state and Medicare taxes from each paycheck. As of 2010, illegal workers have contributed $12 billion to the Social Security system alone. Such workers face poverty in old age, as they are barred from collecting retirement benefits because of their immigration status, and they have not accrued a pension in their home country.
While academic and popular debates tend to focus on differential benefits and costs of trade across countries or industries, this brief highlights winners and losers at the level of individual firms. The authors demonstrate that preferential liberalization produces concentrated benefits among a relatively small number of very large and productive firms.
Pablo M. Pinto, Leonardo Baccini, Stephen WeymouthNovember 21, 2017