The National Academies of Sciences, Engineering and Medicine released a major new report on the fiscal and economic impacts of immigration on the United States yesterday. The report is being heralded by all sides of the immigration debate as the most important collection of research on this issue. This reception could be due to the Academies’ meticulously avoiding any policy implications from their research, allowing policy wonks to draw their own conclusions. Here are my top four policy implications of the new research:
1) Dramatically expanded high skilled immigration would improve federal and state budgets, while spurring economic growth. The fiscal and economic benefits of high skilled immigration are tremendous. The net value to the federal budget is between $210,000 and $503,000 for each immigrant with a bachelor’s degree over their lifetime (the full chart below highlights the overall impact). The sections on immigrant entrepreneurship and innovation are also universally positive. “High-skilled immigrants raise patenting per capita, which is likely to boost productivity and per capita economic growth,” they conclude (p. 205).
2) Legalization could hasten assimilation. One conclusion of the report is that wage and language assimilation is lower among the 1995-1999 cohort of immigrants than among the 1975-1979 cohort. The rise of illegal immigration likely explains much of this difference. More than one in four immigrants today is illegally present in the United States. As Douglas Massey has shown, documented and undocumented immigrants had roughly the same wages until the 1986 law banning employment of undocumented immigrants, which depressed the wages of undocumented immigrants. Legalization would reverse this.
Moreover, other studies have shown that immigrants who are legalized rapidly increase their earnings and invest in skills, including language acquisition. A legalization program that specifically required language classes, education, and workforce participation while restricting welfare, as the 2013 Senate-passed bill did, would further enhance the gains from legalization.