Introducing Data to the Immigration Debate

Illegal immigration is a tumultuous topic for the Obama administration, and continues to be a source of heated debate in the 2016 presidential election. The U.S. Customs and Border Protection (CBP) Agency reports that illegal attempts to cross the Mexico–US border are increasing: In the first half of 2016, approximately 32,117 families were stopped attempting to cross the border. This represents a 131 percent increase from the same period in the previous year. These numbers are increasing against the backdrop of Donald Trump’s prominent “build a wall” rhetoric. While immigration remains a popular topic among politicians, there is rarely an empirical discussion of the impact immigrants have on the labor force or the economy. A recent report by economist George J. Borjas seeks to understand how immigrants who crossed the border illegally may be impacting the workforce. His findings suggest the data may not align with typical political and public expectations.

Borjas utilized Pew Research data from 2012–2013, which contains an estimated predictive variable for an individual’s legal status, and then modified this prediction to extend across a larger dataset, spanning from 1994–2014. Using this estimate of immigration status Borjas measured employment rates and found that undocumented labor supply is almost perfectly inelastic. This inelasticity means that regardless of wage, employment of undocumented workers remains steady. Borjas’ inelasticity is reflected in his employment gap finding as well, which he calculates to be approximately a 14 percentage point difference between employment rates of undocumented immigrants and legal immigrants and citizens.

Four key findings from the study support this conclusion. First, undocumented men were more likely to be employed than either legal immigrants or citizens. Second, undocumented women were less likely to be employed than legal immigrants or citizens, meaning that undocumented women had lower levels of employment than undocumented men. Across age and education groups, undocumented men had the highest employment rates, while undocumented women had the lowest. Third, when controlling for education and skills, the gap in employment rates between undocumented men and legal immigrants or citizens increases, while it narrows for women, replicating the unique differences in gendered employment demonstrated throughout Borjas’ findings. Fourth, employment levels for undocumented men increased from 1994–2014. However, Borjas emphasizes that citizen unemployment rates did not contribute to a rise in employment for undocumented and legal immigrants, these instances occurred separately.

The time period measured by Borjas, 1994–2014, included both periods of economic growth and stagnation, further demonstrating the inelasticity of this labor supply. The impact of these undocumented immigrants is often portrayed in a negative light, highlighting crime and losses in tax revenue. However, given the consistent employment revealed in Borjas’ study it should come as no surprise that undocumented immigrants are a source of tax income for federal, state, and local governments. A recent report from the Institute on Taxation and Economic Policy reported that undocumented immigrants paid $11.6 billion in taxes and estimated that this would only increase with the implementation of Obama’s controversial executive orders. Many of the programs funded in part by this $11.6 billion are not available to undocumented immigrants, such as Medicaid, or welfare. Additionally, in the past ten years undocumented immigrants have contributed $100 billion to Social Security. Again, these immigrants are contributing, without being able to access the funds at retirement.

Immigration is a controversial topic, and discussions and political debates surrounding it are often marked by fear and hate. Borjas’ study provides useful analysis of the positive impact that immigrants are having on the economy. While it is still impossible to determine if these contributions are outweighing negative effects, studies like Borjas’ are key to creating a more fact-driven discussion within a heated debate.

Article source: Borjas, George. “The Labor Supply of Undocumented Immigrants.” National Bureau of Economic Research, Working Paper No. 22102, 2016.

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