New Trump Executive Order Fails Cost‐​Benefit Test

President Trump extended, expanded, and made some important alterations to his earlier executive travel ban. However, the national security justification for the new order is just as weak as for the original order because it could only have prevented nine terrorists who planned domestic attacks, at the maximum, from entering. Since four of the nine terrorists were Iranian students in 1979 who would not have been banned under this order, it’s likely that it would have stopped only five terrorists from entering and saved zero lives if it was applied backward in time.


The Number of Immigrants, Migrants, and Travelers Impacted


Gauging the impact of this new executive order requires looking at the number of foreigners blocked by it. The following calculations are based on the number of visas issued at Foreign Service posts by the State Department in 2016. The number of visas issued by the State Department under this metric is different from the number of those who actually enter and yet still different from the number of actual admissions. The new regulations for Venezuelans only apply to tourists who are related to government officials. There is not a good way to estimate that so Table 1 leaves that category blank for Venezuela. Still, this gives a decent approximation of how President Trump’s new travel ban will impact the flows of immigrants, migrants, and travelers. 


If this new proclamation was active in 2016, it would have halted the travel, migration, or immigration of roughly 66,000 people from these eight countries (Table 1). That’s equal to about 0.6 percent of all visas issued by the State Department at Foreign Service posts in that year. About 58 percent of those blocked would have entered on tourist visas while about 39 percent were immigrants. 


Table 1


Visas Issued by Category/​Type that are Banned under the New Executive Proclamation

Source: 2016 Visas Issued by the State Department.


The other way of measuring this is the number of admissions as calculated by the Department of Homeland Security. As a percentage of all admissions in 2015, the last year for which data is available that was not affected by President Trump’s previous executive orders, this new executive order would have stopped 0.04 percent of all admissions—or about 81,306 out of approximately 181,300,000 admissions. In relation to the number of visas issued and admissions, this new order will have a small impact.


Economic Effects


This section uses a simple method to estimate the economic effects of this executive order over the next decade. This method specifically calculates the immigration surplus which is the wage benefits that accrue to native‐​born Americans as a result of immigration.This only counts the new green card holders and ignores the tourists and economic effects of nonimmigrants. George Borjas estimates the immigration surplus at 0.24 percent of America’s $18.57 trillion GDP, which works out to an average of $1,018.95 in positive wage spillovers per immigrant in 2016.


If the ban continues to block 25,587 green cards each year for ten years then the total loss in wages to native‐​born Americans would be equal to about $1.4 billion. That’s a small percentage of GDP but it still does not pass a cost‐​benefit test. Blocking that many immigrants would have to save about 96 lives in thwarted terrorist attacks to be equal to the expected economic damage borne entirely by native‐​born Americans based on a high $15 million per statistical life saved valuation. 


Conclusions


President Trump’s new executive proclamation would not pass a cost‐​benefit test. Foreigners from those countries have killed zero people on American soil in terrorist attacks from 1975 through the end of 2015 and the 96 deaths that would have to be prevented are more than all of the non‐​9/​11 domestic victims of foreign‐​born terrorism from 1975 through 2015. There are other costs associated with this new iteration of the travel ban such as the continuation of the cut in refugees that also impacts American wages negatively, fewer nonimmigrants, and a falloff in tourism as a result. It’s near‐​impossible for this to pass a cost‐​benefit test even when the welfare of immigrants, foreigners, and their American families are taken into account beyond the economic effects.