Citizenship: An Urban Asset
Sarah Guminski 
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The 2016 US presidential primaries have illuminated a growing interest across parties on the topic of immigration. Although the immigration debate has mostly centered around undocumented immigrants, candidates have also weighed in on the path to citizenship for permanent residents. Virtually all Americans are either immigrants or descendants of immigrants, yet views about this policy area straddle a dividing line.
Much of the previous research on immigration has only measured the effect of naturalization on tax revenue and earnings, but a December 2015 report by Maria E. Enchautegui and Linda Giannarelli at the Urban Institute takes a more comprehensive approach. By including the impact of naturalization on government, benefit program spending in New York City and San Francisco, the researchers find compelling evidence that the annual economic benefits of naturalization are overwhelmingly positive in these two urban areas—about $823 million in New York City and $86 million in San Francisco.
Enchautegui and Giannarelli’s study used American Community Survey (ACS) data collected between 2011 and 2013 to construct a sample of 21 cities to evaluate the potential effect of naturalization on earnings, employment, and homeownership. The study finds that the “earnings increase and employment gains from the naturalization of those eligible…translate into $5.7 billion in the 21 cities combined.” Also, the researchers show that “federal, state, and city income tax and federal payroll tax revenue would increase by $2.03 billion.” These results complement previous literature that show a positive effect from naturalization on tax revenues and earnings.
Next, the researchers isolated the data from New York City and San Francisco to analyze the effect of naturalization on government programs. These cities were chosen because New York City has the highest number of immigrants eligible for naturalization, and San Francisco has the highest rate of naturalization. Using a comprehensive model, the researchers simulated how these changes would affect tax revenues and expenditures on government benefits. In New York City, Enchautegui and Giannarelli find that naturalization would be associated with a decrease in the combined cost of six public benefits: child care subsidies, Temporary Assistance for Needy Families (TANF), the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), the Supplemental Nutrition Assistance Program (SNAP), housing assistance, the Low Income Home Energy Assistance Program (LIHEAP), and Supplemental Security Income (SSI). In San Francisco, although some public benefits needs decrease, the researchers find a net increase in overall government expenditures in the city.
One reason for the increased cost of public benefits in San Francisco, while not in New York City, is that the population of permanent residents eligible for citizenship in San Francisco is significantly older than their New York City counterparts, and thus qualifies for benefits like Social Security and Medicare. However, the important point to note is that, although the cost of public government expenditures increases in San Francisco, it is offset by an increase in tax revenues.
Combining the increased earnings and tax revenues with the effect of naturalization on government program expenditures, the researchers find that, in both New York City and San Francisco, naturalization has a positive net effect on economic conditions. In New York City, tax revenues would increase by $789 million, and public benefits costs would decrease by $34 million, leading to an overall benefit of $823 million. In San Francisco, tax revenues would increase by $90 million, and public benefits costs would increase by $4 million, leading to an overall benefit of $86 million.
In addition to the quantifiable economic benefits of US citizenship, increasing the rate of naturalization is important for other factors as well, such as providing immigrants with the ability to vote, work in government jobs, and sponsor the immigration of relatives. This research shows that the development of partnerships across public and private sectors to facilitate a path to citizenship is vital because it leads to an outcome that both Democrats and Republicans can support: a socially valuable policy with significant cost-saving potential.
Article Source: Enchautegui, Maria E., and Linda Giannarelli. “The Economic Impact of Naturalization on Immigrants and Cities,” Urban Institute, Research Report, 2015.
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