Your questions. Experts’ answers

Q: What is the net economic impact of illegal immigrants? Do the goods produced outweigh the hard costs of having the illegals in the United States? If illegals paid taxes at the same participation rate and proportional amount as resident taxpayers, would the United States be money ahead to let the illegals stay and obtain citizenship?

-- Marc Tisher, Bend, Ore.

Economist Madeline Zavodny answers:

A: A recent estimate from the Council of Economic Advisers is that immigrants as a whole (not just illegal immigrants) add about $37 billion a year to the U.S. economy, on net. It is almost impossible to isolate the net economic impact of illegal immigrants for several reasons.

First, few government surveys explicitly ask people about their legal resident status.  Researchers estimate the number and characteristics of the undocumented population by calculating the total number of foreign-born and then subtracting the number of people estimated to be legally present in the U.S. (based on the number of visas granted, the number of deaths, estimates of the number of people who have returned home, and such).

Second, estimates about the net impact of immigration should be forward-looking. We should consider the effect of immigrants over their entire life in the U.S., not at a single point in time. But it’s hard to predict what economic conditions will be like in the future, so estimates are made using assumptions based on the past and on reasonable projections.

In addition, how to view the U.S.-born children of illegal immigrants is hotly debated. Such children are U.S. citizens at birth, so some studies do not count them as immigrants while others classify them as illegal immigrants because of their parents’ status. This matters a lot because the main cost that some studies attribute to illegal immigrants is their children’s education. Any estimates need to be viewed as just that, estimates.

So, what can we say about the economic impact of illegal immigrants?

First, the economic effect of immigration depends more on immigrants’ education level than on their legal status. More-educated immigrants tend to make a bigger positive contribution to the U.S. economy. Illegal immigrants are predominately young men with very low levels of education (although an increasing number are women and children). Their low average levels of education suggest that illegal immigrants don’t contribute much on net to the economy. But, because illegal immigrants are not eligible for any welfare programs except emergency medical care, they are actually less “expensive” than low-skilled legal immigrants.

Male illegal immigrants have extremely high rates of labor force participation because they are ineligible for almost every form of public assistance. They tend to work in low-skilled jobs (see the answer to Kathleen Sweebe’s question later this week) and probably cause wages in those jobs to be lower than they would be otherwise. Of course, entry of low-skilled legal immigrants also causes wages in those jobs to fall.

Most economic research concludes that immigration has reduced the earnings of natives who do not have a high school diploma. For example, George Borjas and Lawrence F. Katz of Harvard University estimate that illegal immigration from Mexico caused a 3.6 percent reduction in the wages of non-high school graduates in the U.S. during 1980-2000. However, economic research has also concluded that immigration is not the primary reason why wages have stagnated or declined for low-skilled workers in recent years; increased demand for skill, weaker labor market institutions that protect low-wage workers (like unions and the minimum wage), and more trade have played bigger roles than immigration in the decline or stagnation of low-skilled workers’ wages since the 1970s.

Skilled natives, on the other hand, benefit from illegal immigration.  Because of their low education levels, illegal immigrants don’t compete against skilled natives in the labor market.  Instead, illegal immigrants are “complements” for skilled natives -- they provide services that skilled natives buy, like construction, landscaping, housekeeping and daycare.

Research by Patricia Cortes of the University of Chicago indicates that skilled natives benefit from lower prices for goods and services produced by immigrants. Low-skilled natives can also benefit from these lower prices, but their wages are adversely impacted, so, according to her study, their true purchasing power falls as a result of immigration.

A final thought is that legalization tends to lead to large increases in the earnings of formerly undocumented immigrants. An immigration reform plan that included a path to legalization and eventual citizenship for current illegal immigrants would boost their earnings and give them incentives to learn English and acquire more skills. Their children might benefit as well by growing up in more stable households that are not concerned about deportation and that have more economic resources.

Frightening new trend? Not really

Q: A new frightening trend with immigration is trying to force employers into a police role where hiring is concerned. As employers, we want to follow the law and hire only eligible, legal workers. Why are we suddenly expected to be document experts, and punished when we're duped into believing an employee is legal? What's being done to help employers hire legal employees?

-- Anonymous

Immigration attorney Daniel M. Kowalski responds:

A: Not so new, and not so "suddenly." Federal law has obligated employers to verify the identity and work-authorization of most prospective hires since 1986. And as long as the documents provided by prospective hires "on their face reasonably appear to be genuine and to relate to the individual," employers are given safe harbor.

Orlin Wagner / AP Martin Rosas reads from an immigrant rights kit prepared by the United Food and Commercial Workers union for distribution to workers at meatpacking plants.

But after 9/11, and with the rise of identity theft, Congress has begun to focus on secure identity documentation. In April 2007, the House Committee on the Judiciary, Subcommittee on Immigration, Citizenship, Refugees, Border Security and International Law, held a hearing on "Proposals for Improving the Electronic Employment Verification and Worksite Enforcement System." Several witnesses described "EEVS" (Electronic Employment Verification System) as "crucial" to any meaningful immigration reform. Yet other witnesses described the dangers of an EEVS riven with database errors, resulting in work-authorized citizens and aliens being denied work or fired from their jobs. While the specter of a federally mandated "national ID card" has faded somewhat after 9/11, significant technical, logistical and public relations challenges remain before EEVS can become an integral part of our work life.

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