Facts about undocumented immigrants

…sometimes known as “illegal aliens.”  Here goes:

…the work propensity of undocumented men is much larger than that of other groups in the population; that this gap has grown over the past two decades; and that the labor supply elasticity of undocumented men is very close to zero, suggesting that their labor supply is almost perfectly inelastic.

That is from George J. Borjas, hat tip goes to Luke Hamilton Carlso.

Comments

Bad news for the 'welfare scroungers' crowd, but fodder for the 'stealing our jobs' crowd

You mean their children don't go to school and they never use the emergency room?

And *you* mean that they are exempt from sales tax, and their landlords are exempt from property tax? Wow, whatta racket!

Oh come now.

You'd have us believe that a family living on illegal wages buys enough discretionary stuff and lives in posh enough lodging that their sales tax and marginal increase in property tax covers their entire education, medical, and other social cost? You can't be serious.

A rational policy might be to allow individual guest workers rather liberally, but it makes absolutely no sense to bring in whole families consuming significant public resources and providing only a single unskilled laborer.

"Illegal wages" LOL.

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"You’d have us believe that a family living on illegal wages buys enough discretionary stuff and lives in posh enough lodging that their sales tax and marginal increase in property tax covers their entire education, medical, and other social cost?"
I thought productivity was the important thing-- it is when it is about firing people and sending their jobs for China: the employers make more money, cheaper products are avaiable, it is an economic boon. The immigrants are productive--i.e. their employees make money, their work is cheaper. And most Americans don't cover their entire education, medical, and other social costs-- if they did, they would not need public services. If anything illegal immigrants have to be less conspicuous than the natives when it comes to consuming public services.

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"Illegal wages"

I'm guessing that you're saying that they pay insufficient taxes on those earning. This is undoubtably true, however it is hard to find numbers.

As for Tobias' comment: so all that needs to be paid is property and sales tax for all workers? No more income tax, thank god!

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Alain - another reason to replace income tax with consumption taxes and rebates for some because it is offensive to heavily tax the poor?

I like such ideas, but I still think it would be correct to retain some progressive income taxes for the wealthiest. Say, mostly property and sales taxes, and then income brackets of 100k-250k, 250k-1 million, > 1 million. The goal not being to change who pays how much taxes, but to have better incentives.

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If all the undocumented immigrants left the country exactly how much would my taxes be reduced?

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chuck - don't forget your costs would go up. Even if there were a tax savings (debatable) you might end up with less money on your pocket. Not so for the people who would have to be paid more highly to replace them ...

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If they're paying $40,000 in sales tax a year, well sure, they're not tax parasites. But I do not think they are doing that with their $20,000 jobs.

"If they’re paying $40,000 in sales tax a year, well sure, they’re not tax parasites. But I do not think they are doing that with their $20,000 jobs."
Neither are most Americans.

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You are correct that most Americans do not, that is why it is so imperative to not pay for foreigners residing here illegally either. We are not as wealthy as we think we are.

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Sure, John, but we're stuck with our citizens. We don't need to be importing poverty.

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I thought schools were funded mainly through property tax. I didn't realize that immigrants were homeless. Besides, I thought that educating children was a net gain for society. If educating kids is just a drain on taxpayers, why not just close down all schools. Those damn immigrants: working hard at their jobs and sending their kids to school to become educated and assimilated.

No, the property tax has largely been eliminated as a primary source of school funding. On average, property taxes account for an average of 35% of school revenue, and in only a few states is it over 50%. http://nces.ed.gov/programs/coe/indicator_cma.asp

Illegal immigrants are likely to qualify for title I and migrant worker funding, which is federal money that might otherwise be saved *or*, at least, spent on citizen students in need.

We're not allowed to assimilate kids anymore.

Arizona saved a lot of money in education with its illegal immigrant crackdown. https://educationrealist.wordpress.com/2016/03/16/arizonas-experience-and-the-tale-it-tells/ And that's just immediately, not even taking into account the need for fewer teachers, thus fewer pensions, and so on.

"Neither are most Americans."

Federal law guarantees a huge plate of extras to all students, regardless of status. I'd much rather spend that money on citizens.

"Federal law guarantees a huge plate of extras to all students, regardless of status. I’d much rather spend that money on citizens."
But those citizens are... What is the expression? Ah, they are "tax parasites". Saying it this way, they seem more like something one would want to send to the gas chambers than to schools.

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It would be more cost effective to educate the children of foreigners in their home country

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" But those citizens are… What is the expression? Ah, they are “tax parasites”."

Not necessarily. Many guarantees don't take income into consideration.

I'm not averse to spending tax dollars on people who aren't ever going to make up the deficit. The federal law guarantees in education are, however, wasted money. More importantly, it makes little sense to invite even more low-skilled people here to qualify for wasted dollars while driving down pay for our own low-skilled citizens.

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In the event of war, those citizens may at least be drafted.

Not all of the cost of citizenship is monetary.

I've seen ads in Spanish where they explain to illegals that if they take welfare for their children, they won't have to become soldiers. (Obviously, some rumors exist in the community.) But really, they will have to sign up for selective service, so that ad was a little too cute.

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Why not charge the schooling to their kids' accounts? Having grown up in NYC, I know plenty of citizen children of illegal immigrants who grew up to pay plenty of taxes.

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I think the welfare issues are more of a second generation issue.

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Undocumented women, on the other hand, tend to be out of the workforce a lot due to their high fertility.

Maybe they can get Kathy and Carol Fata to take care of their kids, or some elderly IRA veteran.

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The 1986 amnesty caused a huge baby boom among Latinos in California from 1988 into the 1990s, with Total Fertility Rates among Latinos overall (native, legal, and illegal) spiking up to 4.2.

Impressive stat! What was it before the amnesty?

Laura E. Hill and Hans P. Johnson of the Public Policy Institute of California wrote in 2002:

“Between 1987 and 1991, total fertility rates for foreign-born Hispanics [in California] increased from 3.2 to 4.4 [expected babies per woman over her lifetime]. ....

“Why did total fertility rates increase so dramatically for Hispanic immigrants? First, the composition of the Hispanic immigrant population in California changed as a result of the Immigration Reform and Control Act (IRCA) of 1986. In California alone, 1.6 million unauthorized immigrants applied for amnesty (legal immigrant status) under this act. The vast majority were young men, and many were agricultural workers who settled permanently in the United States. Previous research indicates that many of those granted amnesty were joined later by spouses and relatives in the United States… As a result, many young adult Hispanic women came to California during the late 1980s. We also know that unauthorized immigrants tend to have less education than other immigrants and that they are more likely to come from rural areas. Both characteristics are associated with high levels of fertility. As a result, changes in the composition of the Hispanic immigration population probably increased fertility rates.

“Another possible reason for the sudden increase in fertility rates for Hispanic immigrants is also related to IRCA. Because many of those granted amnesty and their spouses had been apart for some time, their reunion in California prompted a “catch-up” effect in the timing of births…”

The fertility rate in Mexico fell from 3.6 in 1990 to 2.2 now. It is likely the same thing happened to the immigrant population in the U.S.

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A lot of Bush Era immigration was by people who couldn't afford to have as many children as they wanted to in their own country.

The general pattern, as depicted by demographer Esteban Parrado of Penn, is for newly arrived Latin American women to have a lot of kids shortly after arriving in America. About a decade later they figure out how expensive it is to raise children well in the U.S. and knock off having more kids, but by then the damage has been done.

http://repository.upenn.edu/cgi/viewcontent.cgi?article=1018&context=psc_working_papers

It's likely that "comprehensive immigration reform" would cause a baby boom just like it did 30 years ago, but we aren't supposed to think about the future.

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The focus on 1987-1991 strikes me rather as cherrypicking data. Like ... who would've guessed? People who wanted babies but delayed having them had a baby or two after after having legal status.

What are the numbers today?

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http://www.ppic.org/content/pubs/report/R_402LHR.pdf

This history is relevant because it was caused by the 1986 amnesty, which John Kasich, Hillary Clinton, and Bernie Sanders want to redo in 2017.

It took until 1998 for Hispanic TFR in California to get back down to 1986 levels. This pig-in-a-python demographic bulge caused major problems for public schools in California, which led to a vastly expensive school-building program, such as the $578 million RFK School on Wilshire Blvd, which finally opened in 2010.

It's all public record, but nobody is supposed to pay much attention to what happened last time.

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“Between 1987 and 1991, total fertility rates for foreign-born Hispanics [in California] increased from 3.2 to 4.4 [expected babies per woman over her lifetime]. ….

That might be factual but nobody can prove it.

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Wikipedia: An elasticity of zero indicates that quantity supplied does not respond to a price change: it is "fixed" in supply. Such goods often have no labor component or are not produced, limiting the short run prospects of expansion.

Selected supply elasticities

Heating Oil: 1.57 (Short Run) [6]
Gasoline: 1.61 (Short Run) [6]
Tobacco: 7.0 (Long Run) [6]
Housing: 1.6–3.7 (Long Run) [6]
Cotton
0.3 (Short Run) [7]
1.0 (Long Run) [7]
Steel: 1.2 (Long Run, from Minimills) [8]
Land: 0, except when land reclamation is taking place

--RL

...and now

Mexican illegal aliens: 0

...btw, the referenced study is contradicted by other studies that show illegal aliens stop coming to the USA during severe recessions, like after 2008.

At first glance, your point about the recession seems obviously correct. But elasticity is about price, whereas they left due to jobs drying up, not the wages of remaining jobs (no?).

Good point, maybe, but maybe not since quantity is also at issue.

PES = The elasticity is represented in numerical form, and is defined as the percentage change in the quantity supplied divided by the percentage change in price.

Hence if we assume quantity supplied decreased dramatically, while price stayed flat (sticky wages), then we should have seen PES in recession --> zero or decrease from the PES in an expansion.

Or so "in theory", but in practice who knows?

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Funny how the topic is always immigration and free trade, but never the $1 trillion dollar year "national security" budget (DoD, DHS, VA, black budget, debt service) or highly restrictive, stipulative ubiquitous economy-suffocating property zoning, including the preservation of single-family detached neighborhoods.

I am fine with free trade and some measure of immigration. I would also enjoy a radical reductions in parasitic federal "national security" outlays and a liberalisation of a 6018 property zoning--- the latter two realities May restrict real GDP more than the former two.

Well, Democrats and Republicans aren't about to do anything about that, so it's not very interesting

That kind of being resigned to the status quo is precisely the problem. People just say "well, neither party is doing anything, therefore let's not even talk about it".

Another one for the long list of reasons that electoral structures which are conducive to stable two party systems are really bad for a country.

Hey, don't look at me, I'm not the one voting for them

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the $1 trillion dollar year “national security” budget (DoD, DHS, VA, black budget, debt service)

DHS is a collection of federal police forces supplemented with civil defense services and an intelligence clearinghouse. Nearly every agency in it other than the TSA existed already in 2002 and the TSA's functions have been performed in American airports since 1973.

It's amusing you fancy that debt service can be allocated to 'national security' considering that the budgets of the military and the intelligence services have not exceeded 35% of current expenditure at any time since 1973.

And of course, 'national security expenditures' are not parasitic. We cannot do without soldiers. We can reduce the population of libertarian trolls to zero and no one not in their social circle would ever notice.

Instead of 11 aircraft carriers (No other country has more than one) why not perhaps 25? There are hundreds of expensive, modern combat aircraft parked in the desert at Davis-Monthan AFB. Were they a good investment? The bizarre missile silos on the northern Great Plains are being emptied and plugged, they didn't cost much, did they? The Pentagon has an unfunded pension obligation that will exceed $2.7 trillion by 2034 but they can probably enpixelate the money and it will increase demand for condos and golf carts so it's all good.

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This is not consistent with illegal immigration being pro-cyclical (or am I wrong to hold that belief?)

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Come on. Undocumented implies that there was an oopsie in the department of immigration and somehow their records got lost. They may be wonderful people, but they are coming over against our laws. Illegal alien is the correct term.

I'm okay with "illegal immigrant" as well

The Israeli government uses the terms "illegal infiltrator."

What would be a "legal infiltrator"?

An infiltrator that received proper legal documentation to enter the country.

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But he is still engaging in illegal acts or he would not be infiltrating.

An American journalist traveling with a group of illegal immigrants across the border would be a legal infiltrator. That being said, illegal immigrant seems more suitable than illegal infiltrator.

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"alien" seems unnecessarily "othering", especially given that we now apply the word to extra-terrestrials, which was not the case when the term first came into usage, initially just for any foreigner (yeah?).

I don't see why there should be any pussyfooting around the "illegal" aspect of things. If you want to accept more immigrants, make the public policy case, don't just open the back door (or refuse to lock it) and throw your hands up in faux depair when observing how many millions come.

"If you want to accept more immigrants, make the public policy case, don’t just open the back door (or refuse to lock it) and throw your hands up in faux depair when observing how many millions come"

But that seems to be the strategy followed everywhere.

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I'm on board with cutting back the National Security State. Whom do you think is more likely to pursue that goal Trump or Hillary?

As for zoning codes that favor detached single family homes, I'll make you a trade. You can have liberal zoning laws, and I want a repeal of Fair Housing Laws and enforcement of restrictive covenants.

Neither would cut back the National Security State. Some suggest that we should refrain from discussing it as a result. I think it suggests the conversation is all the more necessary. A possible concern is that if they have fewer resources, they may be willing to cut corners even further as a result. However, it's easier to manage a smaller agency in a manner that does not allow as much possibility for violations.

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A recent study shows that illegal aliens benefit from a transfer of about $500 billion from the private sector that would have gone to working class Americans. This is lost payroll not taxes which arguably is another half a trillion or so. Not to mention that deaths in this country from Illegals exceed 5000 a year, people who would still be alive if we enforced our immigration laws.

You're simply making that up.

Nope. There was a recent article about the numbers of Americans out of work whose job was being filled by illegals and the numbers whose pay has gone down or failed to keep up with costs thanks to the low pay illegal workers. half a trillion a year lost by American workers. As for the deaths, again right from news articles. Drunk driving, robberies gone bad and drug related murders add up to 5000 or so deaths by illegal immigrants every year. What you should be upset by is our leaders trying to cover it all up as they make the problem worse.

Hmm, no source for the 'recent article' -- yeah, I think you're making it up, as well as the one about the total crime stats. Prove me wrong. Also $500B/10M undocumented workers = $50K per worker. Nice!

This site is not the article I referenced but it show essentially the same data. http://cis.org/immigration-and-the-american-worker-review-academic-literature

"The immigration surplus of $35 billion comes from reducing the wages of natives in competition with immigrants by an estimated $402 billion a year,"

This reference puts the deaths by illegals quite a bit higher than my number. http://www.wnd.com/2006/11/39031/

It says 4380 murdered every year and 4745 killed by drunk illegal drivers.

O, so you can't find the 'article' so you cite 2 dodgy sources instead? CIS must have assumed 1 million new immigrants a year ad infinitum, which we certainly haven't seen on the undocumented side. We've still got about 10 million of those total, so the $405B figure is still way off base. Know why? CIS is counting *all* immigrants.

The WorldNetDaily piece is 10 years old, but worse than that: it's from WorldNetDaily. It admits that it has no actual data, since no one collects that. Here's a sample of their 'methodology' -- they cite the AAA about 20% of fatal accidents involve at least one driver without a license, without even bothering to guess at how many non-immigrants lack a license.

Drunk driving is bad, but drunk blogging is worse. Please delete your account.

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So, because from the abstract I can't tell, how is this actually estimated when when they are not documented and so don't pass through the system?

It makes sense that while men at undocumented, they work, in various illegal and tax dodging capacities that probably ultimately undermine the tax revenues of the USA. Because who's actually going to just give them money?

And then when they can't work, their either get documented or deported. In either case are no longer "undocumented".

But how is the actual estimation working here? To take account of how many are homeless, temporarily supported by family and friends (not zero, I don't think), work in ways more criminal than the (still criminal) act of working in the US without any leave to be there, etc.

Apple probably dodges more taxes alone than the entire sum of taxes uncollected as a result of informal work by illegal immigrants at $5-10 an hour. Also, that money mostly stays in the system, spent within weeks or a month or two, and will be taxed fairly soon as it re-enters the formal economy.

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Illegal immigrants' tax contributions:

http://www.itep.org/immigration/

http://www.thefiscaltimes.com/2015/04/16/Study-Finds-Illegal-Immigrants-Pay-118B-Taxes

From the Fiscal Times link:

"who work paid more than $11.8 billion in state and local taxes in 2012, even while they were living illegally in the country. ...
The group’s analysis estimated that illegal immigrants’ combined nationwide state and local tax contributions would increase by $845 million under full implementation of Obama’s 2012 and 2014 executive actions and by $2.2 billion under comprehensive immigration reform."

My guess is that this is a conservative estimate. But it indicates that illegals are paying at a significantly lower rate than citizens at the same income level.

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Which is an argument for keeping the status quo.

I'm not sure why both sides insist on changing the status quo. It works pretty well.

This is one good thing about illegal immigration the US. Our illegal immigrants come here to work, and they do work. A LOT. Unlike Europe where they come for the welfare benefits and mostly don't work, and hence cause problems.

Thank God for the status quo.

The status quo won't hold. The Democratic party stands to gain a huge pot of votes by legalizing the current crop of illegals. The incentive going forward will be to repeat the cycle at every opportunity. Meanwhile, they'll decry the poor state of low skilled workers who can't manage to find good paying jobs.

I know. Politically, it is untenable. But realistically, this is why the status quo works very well. It explicitly attracts only those illegal immigrants who want to work, and forces them to work because otherwise there's no point to being in the US. So we benefit. Who cares if they are "illegal".

Once we change this, we're going to get lots of welfare seekers who have no interest in working.

This is why the Republican "alternative", bar the insanity of Donald Trump, works a little better. Prevent illegal immigration in the first place, and then make them legal. It's still not as good as the status quo, but at least it will prevent the follow-on surge of welfare seeker immigrants.

But given the insanity of Republicans at this point, even this is too politically untenable.

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