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Introduction

In recent decades, the issue of what to do with undocumented residents living in the United States has been part and parcel of the broader immigration debate. The essential divide on this subject is about the future legal status of these unauthorized immigrants. On one side, there are those who advocate for immigration reform to allow most undocumented immigrants to stay in the United States. On the other side are those who favor strict deportation regulations. A third group, however, are those who consider it impractical to deport all of the estimated 10.7 million undocumented immigrants currently in the United States and support a plan to allow most of them, under certain conditions, to remain in the country. The reasons for each of these positions range from national security concerns to humanitarian explanations to economic considerations. This research paper evaluates the economic considerations of each position via a cost-benefit analysis. It seeks to answer the oft-debated question: How much do undocumented residents cost the country, and how much do they contribute to the country in sheer material terms?

This is not an easy question to answer, as undocumented residents are, by definition, and increasingly so, hidden from plain view. Most data available to assess their costs and benefits to society are therefore incomplete and even suspect. Even so, there are data and methods that can be used to calculate the costs and benefits produced by the undocumented population in the United States. Moreover, because some studies have shown that immigration fosters economic growth in host nations, we will assume that this extends to undocumented migrants too. In other words, they are not net consumers or users. They often produce their own wealth and contribute to society. The key is to find data that can show how much the unauthorized population takes from and gives to its host country. In the case of the United States, there is an added urgency to calculating this, given that it is likely that an aging workforce and the stagnating population growth will require added immigration, especially younger workers, who can engage in economic activities, such as joining labor markets and paying taxes. Granting legal status for those who are already here, working and building families, is therefore not a bad idea. Deporting undocumented workers, who tend to be young, economically active taxpayers with the potential to create new jobs and businesses and to generate new products and technology, could in fact be counterproductive. Understanding their impact, both positive and negative, is therefore important when decisions are made on their legal status.

This paper begins with a central hypothesis based on previous studies on authorized migrants: The net benefits of undocumented residents are greater than the costs of the public services they utilize. This hypothesis is more complex than it appears and difficult to test. First, it is important to calculate how many undocumented residents there are in the country. According to various sources, the current number of undocumented immigrants has been estimated to be between 10.7 million (Pew Research Center) and 11.3 million (Migration Policy Institute). Both estimates indicate that the number of undocumented immigrants has decreased in recent years, partly due to a decline in immigrants from Mexico and from aggressive deportation policies under former President Barack Obama and President Donald Trump. Second, many undocumented residents work off the books or work with false documents and therefore come across as documented in the system. Of course, neither they nor their employers report their status for fear of deportation or penalties. Third, many unauthorized residents live in mixed-status homes, with some members who are citizens, others who are legal permanent residents, and still others who are undocumented. A public benefit obtained by a citizen that comes into a mixed-status household and also benefits an undocumented member is difficult to calculate. Therefore, there is no exact information on how many undocumented immigrants there are in the United States, the exact structure of their income and expenditures, their location, or the amount of taxes they pay, among other things. Of course, there is also the question of their burden to law enforcement, especially when the government chooses to go after them and detain them for prolonged periods of time. That, however, is a governmental choice and difficult to attribute as a cost to the undocumented resident. Still, an effort can be made to measure their benefits and costs, directly and indirectly.

To be sure, there is an alternative hypothesis—that the costs exceed the benefits produced by the undocumented residents of the United States. Undocumented immigrants, like everyone, do generate costs. The enormous task of calculating those figures, of course, remains the same. Indirect methods must be found to measure both the costs and the benefits and to determine the balance of the two.

This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy. The views expressed herein are those of the individual author(s), and do not necessarily represent the views of Rice University’s Baker Institute for Public Policy.