The Border Wall Cannot Pay for Itself

Recent budget talks between the White House and Congress shows that President Trump puts a high value on funding the construction of a border wall. Crucial to this debate is how much a border wall will cost to construct and maintain. Center for Immigration Studies (CIS) published a brief report purporting to show that building a wall along the southern border would pay for itself if it keeps out only 160,000 to 200,000 border crossers over the next decade. That means the border wall would only have to deter about 9 to 12 percent of all illegal border crossers who would have successfully made it into the United States during that period. The report uses a variety of assumptions that unrealistically lower the cost of the wall as well as inflate the fiscal cost of border crossers.

We used more recent and precise data to update CIS’s analysis without altering its methodology. Simply using newer numbers—with no changes to the report’s unrealistic underlying assumptions—proves that the border wall cannot pay for itself. Despite fanciful promises to the contrary, a border wall is too expensive and will deter too few illegal immigrants to pay for itself—even under assumptions that are extremely generous to those who support a wall.

Updating CIS’ Analysis

The first update was to factor in a more recent estimate of the cost of a border wall. The CIS study chose to rely on a statement made by Senator Majority Leader Mitch McConnell (R-KY) rather than any actual cost estimate. We used an official estimate from the Department of Homeland Security (DHS) issued after the majority leader’s comment. This placed the cost of building a 1,250-mile border wall at $21.6 billion, or $17,280,000 per mile, that includes all costs such as the condemnation of private property through eminent domain. We also include the yearly maintenance costs. 

The second is that we adjust CIS’ fiscal cost estimate by controlling for the age of the border crossers. The National Academy of Sciences (NAS) fiscal cost estimates show that the immigrant age of arrival is vital for estimating their fiscal impact. CIS used the 2010 education level of Mexican illegal immigrants as a proxy for the education level of all future border crossers. We used the March CPS to adjust for this by assuming that the education of future illegal immigrants will be more similar to those arriving in 2015 than 2010. We further divided up the illegal border crossers by age and education to get a more accurate view of their potential fiscal impact. 

Using a more recent estimate of the border wall cost as well as the age of entry and education levels for unlawful border crossers shows that the border wall would have to deter the entry of about 1 million illegal immigrants over the next ten years to break even—an estimated 5 to 6.3 times as many as CIS estimated. Furthermore, this means that the border wall would have to permanently deter 59 percent of the predicted border crossers over the next ten years to break even. This does not include the cost of any additional enforcement measures such as hiring more border agents, border returns, or border deportations. 

Calculating the Fiscal Cost

First, we used the 2016 March CPS to look at the ages and education of new immigrants from Mexico and Central America who comprise virtually all unlawful immigrants who enter as border crossers (Table 1).

Table 1

New Central American & Mexican Immigrants by Age & Education in 2015

 

0-24

25-64

65+

Less than HS 18.93% 25.73% 1.94%
HS Grad 10.19% 18.45% 0.49%
SC 2.91% 9.22% 0.97%
College 0.97% 5.83% 0.00%
College+ 0.00% 4.37% 0.00%

Source: 2016 March CPS.

Second, we took the average fiscal net present value (NPV) for each education-age cell from the NAS’ Table 8-12 (Table 2). We chose Table 8-12 because that was the table chosen by the author of the CIS report. 

Table 2

Fiscal Net Present Value of Immigrants by Age of Arrival & Education in 2015

 

0-24

25-64

65+

Less than HS -24,000 -225,500 -265,625
HS Grad 77,625 -105,125 -174,625
SC 156,625 12,375 -161,000
College 210,125 213,750 -179,875
College+ 199,375 547,125 -122,375

Source: National Academy of Sciences, averages from Table 8-12.

Third, we used CIS’ downward adjustment numbers to diminish the fiscal NPV to account for them being illegal immigrants (Table 3). This is the most objectionable part of the CIS study. Their downward adjustment figure is based on numbers from a notoriously flawed report, assumes a non-discounted household fiscal value is comparable to the NAS’ individual level fiscal net present value estimate, adjusts benefits and tax revenues down equally even though illegal immigrants receive virtually zero welfare benefits, and are unadjusted by age. We kept this highly flawed step to show that we did not have to change CIS’ methods to get drastically different results. A better downward adjustment figure would decrease government expenditures on illegal immigrants more than their tax payments. 

Table 3

Adjustment Downward

 

0-24

25-64

65+

Less than HS 0.676 0.676 0.676
HS Grad 0.799 0.799 0.799
SC 0.893 0.893 0.893
College 0.221 0.221 0.221
College+ 0.221 0.221 0.221

Source: Center for Immigration Studies.

Fourth, we multiplied each cell by its corresponding cell in the above charts to get the fiscal NPV of illegal immigrants by age, education, and the percentage of immigrants by age/education cell (Table 4). This table is not useful outside of this cost projection as it is merely a means to add together the average NPV of a new border crosser. 

Table 4

Fiscal Net Present Value of Immigrants by Age of Arrival & Education in 2015

  0-24 25-64 65+
Less than HS -3,072 -39,219 -3,487
HS Grad 6,323 -15,494 -677
SC 4,074 1,019 -1,396
College 451 2,752 0
College+ 0 5,283 0

Source: Authors’ Calculations.

Adjusting for age and education, the average NPV fiscal cost of a new illegal immigrant border crosser is -$43,444, which is 42 percent less than CIS’ estimate of -$74,722.

Calculating the Cost of the Border Wall 

Calculating the cost of the border wall over the next ten years is the second portion of this model. We use the newer DHS cost estimate, assume all construction costs occur in the first year, and that the length of the new border fence will cover the remaining 1,637 miles of the border where there currently isn’t a pedestrian fence. We also included annual maintenance costs not counted in the CIS estimate for the entire length of the wall (Table 5). Our more realistic ten-year cost estimate for the border wall is $43.8 billion – 2.9 to 3.7 times as high as CIS’ estimate. 

Table 5

Cost of Border Wall

Year Construction Costs (Per Mile) New Fence (Miles) Border (Miles) Current Fence (Miles) Construction Costs (Total) Maintenance Costs (Per Mile) Maintenance Costs (Total) Total Cost
1 $17,280,000 1,637 1,954 317 $28.3 billion $864,353 $274,000,000 $28.6 billion
2 $17,280,000 1,637 1,954 317 $0 $864,353 $1.69 billion $1.69 billion
3 $17,280,000 1,637 1,954 317 $0 $864,353 $1.69 billion $1.69 billion
4 $17,280,000 1,637 1,954 317 $0 $864,353 $1.69 billion $1.69 billion
5 $17,280,000 1,637 1,954 317 $0 $864,353 $1.69 billion $1.69 billion
6 $17,280,000 1,637 1,954 317 $0 $864,353 $1.69 billion $1.69 billion
7 $17,280,000 1,637 1,954 317 $0 $864,353 $1.69 billion $1.69 billion
8 $17,280,000 1,637 1,954 317 $0 $864,353 $1.69 billion $1.69 billion
9 $17,280,000 1,637 1,954 317 $0 $864,353 $1.69 billion $1.69 billion
10 $17,280,000 1,637 1,954 317 $0 $864,353 $1.69 billion $1.69 billion

Source: DHS, Reuters, Authors’ Calculations.

Results

Comparing the adjusted fiscal NPV of -$43,444 to the adjusted wall cost of $43.8 billion reveals that the wall would have to deter just over 1 million illegal immigrants who would have otherwise entered the United States. That means the border wall, by itself, would have to deter about 59 percent of all border crossers who would have otherwise successfully entered. This result only comes from using more updates and specific numbers than CIS did and not by changing their underlying methods. 

Three Additional Simulations

We ran three additional simulations to see how CIS’ estimate holds up under slightly different assumptions. Our first simulation uses a different fiscal cost estimate. Our second relies on a different assumption about the flow of illegal immigrant border crossers. Our third relies on a different border wall cost of construction estimate.

Our first simulation kept every table above as the same except we replaced Table 2 with the better fiscal cost estimate from Table 6. The new Table 6 contains the fiscal NPV of immigrants for the federal government only and excludes the incremental costs of public goods. This is the best table because the federal government will actually be paying for the wall and because spending on pure public goods does not increase due to more immigrants because they are non-rivalrous and non-excludable. Table 6, combined with the other tables above, produced an average fiscal NPV of -$33,932 for each illegal border crosser. Plugging that higher fiscal NPV into our model shows that the border wall would have to deter 1.3 million unlawful immigrant border crossers, or 73 percent of all those who would come without the wall, to break even—a number 6.2 to 7.8 times as high as CIS’ estimates.

Table 6

Federal Only NPV Per Immigrant, Public Goods Excluded

 

0-24

25-64

65+

Less than HS 13,000 -215,000 -229,000
HS Grad 108,000 -109,000 -152,000
SC 189,000 2,000 -149,000
College 264,000 220,000 -159,000
College+ 271,000 567,000 -104,000

Source: National Academy of Sciences, averages from Table 8-15.

The second simulation we ran uses CIS’ tables but assumes that the 50 percent reduction in illegal immigrant entries during February and March of 2017, relative to the same months in 2016, continues for the next decade. This means that there would be an estimated 850,000 successful border crossers over the next decade rather than the higher pre-Trump estimate of 1.7 million. However, the costs of the wall do not budge. In this situation, the border wall would have to deter 118.5 percent of the number of estimated border crossers over the next decade to break even—a mathematically impossible feat. 

The third simulation we ran uses the Massachusetts Institute of Technology (MIT) cost estimate for the border wall, which is similar to a cost estimate produced by Senate Democrats on the House Homeland Security and Government Affairs Committee. The only difference is that we took MIT’s per mile estimate and added 36.3 percent for the cost of land acquisition. This brings the 10-year border wall construction and maintenance costs up to $98.6 billion. Under this scenario, the border wall would have to deter 2.3 million to 2.9 million border crossers over the next decade to break even—an estimate 134 percent to 171 percent of all the border crossers that the government predict to come over the next ten years. That is mathematically impossible.

A Better Cost Estimate Should Include These Variables

A better fiscal cost analysis of the border wall will include the more detailed demographic and age profile of anticipated illegal immigrant border crossers as well as several other factors listed below.

  1. The wall will not prevent nearly as many apprehensions as assumed. CIS’ report does not provide any evidence that the wall will stop illegal immigrant border crossers. There is virtually no evidence that the current border barriers—particularly those outside of urban areas—have any impact on the net flow of illegal entries. The main effect of border barriers is to channel illegal border crossers into more remote areas. The Congressional Research Service concluded, “The primary fence, by itself, did not have a discernible impact on the influx of unauthorized aliens coming across the border in San Diego.”
  2. Marginal apprehensions are costly. CIS also assumes that catching people has zero fiscal cost. A proper fiscal accounting compares all of the taxpayer costs and benefits of apprehension with all of the costs and benefits of the illegal border crosser living and working in the United States. Ideally, such an estimate would also compare the costs and benefits of allowing the worker into the United States legally with a guest worker visa or some sort of other employment authorization document. According to the Department of Homeland Security, each removal of an unauthorized immigrant costs taxpayers almost $9,000. Almost half of the immigrants included in this estimate were apprehended in the interior as opposed to the border. Assuming that border removals are half as costly as those in the interior, apprehending 1.7 million illegal border crossers and deporting them will cost $7.65 billion dollars. 
  3. Walls don’t apprehend border crossers. Government employees do, and they are expensive. CIS also assumes that enforcement of the wall will require no additional personnel, despite the fact that the executive order requiring its creation mandates the hiring of 5,000 additional border agents. “If you build a wall, you would still have to back that wall up with patrolling by human beings,” Homeland Security Secretary John Kelly recently told Congress. The annual average cost of a federal employee including benefits is $123,160. This makes the ten-year cost of 5,000 new employees roughly $6.2 billion on top of the cost of apprehensions.
  4. Not all border crossers retire in the United States. CIS assumes that border crossers retire in the United States at the same rate as other immigrants. This point is important because a large proportion of the fiscal costs are incurred after the worker retires and becomes eligible for Social Security and Medicare. However, border crossers are much more likely to return to their home countries than retire in the United States. Harvard economist George Borjas found that 42 percent of Mexican immigrants, who make the largest share of the illegal immigrant population, emigrated in the 1990s while the worldwide average was just 18 percent. Mexican illegal immigrants are most likely to be illegal border crossers. Some research indicates that the illegal immigrant emigration rate could even be 50 percent. Thus, fiscal costs later in life need to be adjusted downward for age and rates of immigration for illegal border crossers.
  5. Border crossers are younger than the average immigrant. The age of the border crossers changes the estimates of the net fiscal impact. CIS and Cato rely on older and imperfect estimates from the Current Population Survey. The latest Border Patrol estimate of the age of apprehended border crossers is from 2010 and the huge surge of Unaccompanied Alien Children has since decreased their average age. The NAS report acknowledges that the younger age profile of illegal immigrants reduces their net fiscal cost: 

“These estimates suggest that unauthorized immigrants as a group may have a more positive fiscal impact than authorized immigrants, but only because of their age structure. The average undocumented immigrant is of younger working age than the average documented immigrant (there are very few undocumented immigrants of retirement age); thus, the net fiscal impact of the former is more positive at the federal level and overall. Also, as detailed in Chapter 3, undocumented individuals, young unauthorized immigrants who qualify for the Deferred Action for Childhood Arrivals program, temporary visa holders, and recent legal permanent residents are ineligible to receive benefits from some programs; and unauthorized immigrants do not qualify for the earned income tax credit. Nonetheless, since, at any given age, unauthorized immigrants tend to earn less than their authorized counterparts, controlling for age, they are less of a benefit to public finances than authorized immigrants (p. 280).”

  1. Unauthorized immigrants expand economic growth, which increases tax revenues. Any fiscal cost estimate needs to consider the lost tax revenue from reduced economic growth. 

Conclusion

Those who support Trump’s border wall should be able to make the case without relying on unrealistically cheap construction costs and outrageous estimates of the number of illegal immigrants that it will deter. Assuming future border crossers have similar ages and educations as more recent crossers make it virtually impossible for the border wall to pay for itself. Adjusting for higher border wall construction costs estimated by MIT means the wall, by itself, would have to deter more people who are estimated to even enter over the next decade without a wall. Whatever the purported benefits of such a wall, its construction will cost a great deal more than it will save even under very generous assumptions.