How Can Citizenship for Undocumented Immigrants Boost U.S. Economic Growth?

Granting Path to Citizenship to Undocumented Would Boost U.S. Economy by Nearly $2 Trillion

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  • UC Davis joint study with Center for American Progress

This blog summarizes and highlights an initial report by Giovanni Peri, professor of economics and director of the Global Migration Center at the University of California, Davis, and Reem Zaiour, a Ph.D. student in the Department of Economics at UC Davis. Read the full report here.

Granting a pathway to citizenship to all undocumented immigrants in the United States would boost the nation's economy by $1.7 trillion over the next decade while creating 438,800 new jobs, according to a new report by the Center for American Progress, or CAP, and the University of California, Davis. 

The report published this month by CAP,  a progressive think tank, modeled different economic outcomes based on scenarios where different groups of undocumented immigrants were granted a pathway to citizenship. According to the report, the 10.2 million undocumented immigrants who currently live in the United States have lived in the country for an average of 16 years.

“Combining data and well-established economic modeling, we clearly find that putting undocumented immigrants on a pathway to citizenship would benefit the nation’s economy,” said Giovanni Peri, professor of economics at UC Davis, director of the university’s Global Migration Center, and co-author of the report.

These significant results are generated by the direct wage and productivity increases produced by legalization of undocumented workers; the response of demand and business investments to their larger productivity; and, over the following 10 years, the higher education that young undocumented are predicted to attain.

Today, 10.2 million undocumented immigrants are living and working in communities across the United States. On average, they have lived in this country for 16 years and are parents, grandparents, and siblings to another 10.2 million family members. At the same time, it has been nearly 40 years since Congress has meaningfully reformed the U.S. immigration system, leaving a generation of individuals and their families vulnerable. Poll after poll has illustrated that the vast majority of Americans support putting undocumented immigrants on a pathway to citizenship. And as the nation emerges from the COVID-19 pandemic and looks toward the future, legalization is a key component of a just, equitable, and robust recovery.

As the Biden administration and Congress craft their recovery legislation and consider how best to move the nation’s policies toward a more fair, humane, and workable immigration system, the Center for American Progress and the Global Migration Center modeled the economic impacts of several proposals that are currently before Congress. Using an aggregate macro-growth simulation, the model illustrates the benefits to the whole nation from putting undocumented immigrants on a pathway to citizenship. Such legislation would increase productivity and wages — not just for those eligible for legalization, but for all American workers—create hundreds of thousands of jobs, and increase tax revenue.

Using an aggregate macro-growth simulation, the report looks at four potential scenarios, where Congress grants a pathway to citizenship to: all undocumented immigrants; undocumented immigrants working in essential occupations; Dreamers and those eligible for Temporary Protected Status (TPS); and a combination of Dreamers, those eligible for TPS, and essential workers.

For each one of these scenarios, the study finds that during the next decade:

  1. Providing a pathway to citizenship for all undocumented immigrants in the United States would boost the national GDP by $1.7 trillion and create 438,800 new jobs over the next decade. It would benefit all workers.
    • Five years after implementation, those eligible for legalization would experience annual wages that are higher by $4,300.
    • Ten years after implementation, those annual wages would be $14,000 higher, and all other American workers would see their annual wages increase by $700.
  2. Providing a pathway to citizenship for Dreamers and TPS-eligible individuals under the American Dream and Promise Act would increase the national GDP by $799 billion over 10 years and create 285,400 new jobs.
    • Five years after implementation, those eligible for legalization would experience annual wages that are higher by $4,300.
    • Ten years after implementation, those annual wages would be $16,800 higher, and all other American workers would see their annual wages increase by $400.
  3. Providing a pathway to citizenship for undocumented immigrant essential workers would boost the GDP by a total of $989 billion over 10 years and create 203,200 new jobs.
    • Five years after implementation, those eligible for legalization would experience annual wages that are higher by $4,300.
    • Ten years after implementation, those annual wages would be $11,800 higher, and all other American workers would see their annual wages increase by $300.
  4. Providing a pathway to citizenship for Dreamers, TPS-eligible individuals, and essential workers would boost the GDP by a total of $1.5 trillion over 10 years and create 400,800 new jobs.
    • Five years after implementation, those eligible for legalization would experience annual wages that are higher by $4,300.
    • Ten years after implementation, those annual wages would be $13,500 higher, and all other American workers would see their annual wages increase by $600.

Undocumented immigrants are embedded in the United States’ infrastructure

Undocumented immigrants have long been essential to the nation’s economic growth and prosperity. As the country battled the coronavirus pandemic and economic fallout over the past year, the role of undocumented immigrants in ensuring the well-being and safety of all Americans formed part of the national conversation surrounding essential work. Nearly 3 in 4 undocumented individuals in the workforce—an estimated 5 million—are essential workers. 

Despite playing a pivotal role in keeping the country functioning, undocumented immigrants are among the communities hardest hit by COVID-19 and have been continually excluded from past economic recovery efforts and aid programs, all while living under the daily threat of deportation. The reality is that the United States will not rebuild an economy that works for all until it recognizes the ways undocumented immigrants have contributed to the country’s success, and economic recovery legislation considers the needs of the undocumented community. As this report details, legalization and a pathway to citizenship would provide the necessary relief and security for undocumented families and would bring a much-needed boost to the U.S. economy.

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