ECONOMICS OF IMMIGRATION Kalyan (Kal) Chakraborty PhD, Associate Director, Research P 850-439-5418 E - kchakraborty@uwf.edu April-8, 2017
ECONOMICS OF IMMIGRATION America s Great Job Creators: Immigrant Entrepreneurs (video clip 2.11 min) https://www.youtube.com/watch?v=y78ocg8dziy
Fig 1: People on the Move [MGI-2016]
Fig 2: Global Economic Impact of Migrants [MGI-2016]
Fig 3: Migrants Share of Labor Force, Top-7 Nations
Fig 4: Top-10 Migrant Origins and Destinations [MGI-2016]
Who are Immigrants for the Purpose of this Study? Immigrants are persons living in the United States: 1. Who were not American citizens at birth 2. Includes naturalized American citizens 3. Legal permanent residents (green card holders) 4. illegal aliens 5. Long-term temporary visas (foreign students, guest-workers)
Economics of Immigration Discussion A. The profile of immigrants in the U.S. B. The effect of immigrants on productivity, wages, and employment C. The effects of immigrants on Medicare Trust Fund D. Undocumented workers contribution: state/local tax, social security E. Economic benefits of retaining international students F. Summary and conclusions
A. The profile of immigrants, Census Data 2014-15 1. One-in-3 workers in CA & one-in-100 workers in WV are immigrants 2. In 2014, 42.2 million immigrants (legal + illegal = 13.3% population) (the highest % in 94 years) 3. 25% of immigrants > age 18 has less than high school diploma (6% of natives) 4. 21.4% of the immigrants lack insurance (8.8% of natives) 5. Share of Food Assistance & Medicaid: Immigrant HH (27.3%; 33.6%) Natives HH (15.9%; 20.3%)
Tab1 :Selected Characteristics of Immigrants and Natives in Labor Force (18 years +) Natives Immigrants Arrived after 2010 Less than H.S. % 6 25.4 19.9 H.S. Only % 26.2 23.0 22.1 Some College % 35.3 21.3 17.9 Bachelor s + % 32.5 30.3 40.1 Bachelor % 21.0 17.4 22.8 Graduate or Professional % 11.5 12.9 17.3 Median Annual Earnings $46,172 37,182 35,129 Median Household Income $54,695 49,561 41,132 Average Household Size 2.4 3.1 2.8 Median Age 35 43 28
B. The effect of Immigrants on Productivity, Wages, & Employment
Tab 2: Impact of Immigration on Wages by Education Level
Fig 6: Native-born and Foreign-born Workers as a Share of Occupation Types, 2016
C: The effect of Immigrants on Medicare Trust Fund Research at Harvard Medical School (Zallman, et al. 2013): 2009: Immigrants contributed to HITF $33.1 billion and Took out $19.3 billion Created $13.8 billion surplus. U.S. born citizens created $30.9 billion deficit Noncitizen immigrants contributed a surplus of $10.1 billion (out of $13.8B) Between 2002 and 2009 Immigrants created a net surplus of $115.2 billion Among Medicare enrollees, immigrants had $1,465 less expenditure than U.S. born citizens Per-capita SMITF expenditures for immigrants were $175 lower than U.S. born, and for noncitizens were $601 lower than U.S. born 2009: The dependency ratio (working age 16-64 to retiring age people) for Immigrants = 6.5:1; Non-citizens = 12.4:1; and U.S. born = 4.7:1
Fig 8: Net Medicare HITF Surplus or Deficit Attributable to Immigrants, Noncitizens, and U.S. Born, 2009
D: Undocumented Workers - State/local Tax & Social Security Trust Fund Per Year (2009-12) Top-6 State Status Sales-Excise Tax ($mill) Income Tax ($mill) Property Tax ($mill) Total Tax ($mill) California Current 1,952 156 1,063 3,171 Full Legal 2,147 303 1,169 3,619 Florida Current 454 NA 134 588 Full Legal 499 NA 147 646 Illinois Current 344 93 305 742 Full Legal 379 183 336 898 New Jersey Current 267 49 274 590 Full Legal 294 73 301 668 New York Current 568 182 358 1,108 Full Legal 625 336 393 1,354 Texas Current 1048 NA 495 1,543 Full Legal 1,152 NA 544 1,696 All States Current 6,951 1,095 3,597 11,643 Full Legal 7,646 2,166 3,957 13,769 Change $ +695 +1,071 +360 +2,126
Social Security Trust Fund OCACT Actuarial Note No. 151, April 2013 [2009] 21.7 million foreign born individuals living in the U.S. (non U.S. citizen) Of these 12.6 million were not legal permanent residents of the U.S. Of these, 10.8 million reside in the U.S. in an unauthorized status Of this estimated 8.3 million immigrants are working 2010 3.9 million unauthorized immigrants worked in the underground economy 3.1 million unauthorized immigrants working and paying Social Security taxes $13 billion payroll taxes are collected from these workers and their employers The excess of tax revenue paid over the benefits received is $12 billion net
E: Economic Benefits of Retaining International Students
Economic Benefits of International Students Enrollment in the U.S. 10-Yr Trend
The Chicago Council of Global Affairs, 2016 Open Doors Institute of International Education 2016 1. International students in the U.S. topped one million 2015-16 2. Make up of 5% of the students in the U.S. higher education 3. Contributed > $35 billion in the U.S. economy in 2015 4. Top-2 growth states are California (10.5%) and Florida (10.4%) 5. Immigrants founded 25% of new high tech companies (2006-2012) 6. These firms generating $63 billion in sales and employing 560,000 workers in 2012 (MIPR) 7. Immigrants with advanced degrees are 3 times more likely to file patents than their native-born peers (MIPR)
For Congressional District 01: UWF + PSC Total Intl. Students = 484; Financial Contribution = $14.8 million; Jobs Created Locally = 223
Fig 11: Top 4 Places of Origin for International Students
Fig 12: Field of Study [IIE-2016]
Fig 13: Field of Study STEM and Business [IIE-2016]
The Chicago Council of Global Affairs, 2016 How the immigration status of the 3-groups of students affects their transition from college to employment and at what cost? Foreign born students F-1 visa holder Lawful permanent residents (LPR) Undocumented students
Tab-3: Estimated Loss of Wages & Income Tax by Top-10 States Due to Low Transition of F-1 Visa Holders
Scaling the border could block America s Education Export? 1. Higher education is a major U.S. service export (why? Foreigners pay to U.S. institutions) 2. Education accounts for 5% of the entire national export sector (BEA-16) 3. Direct spending on education by the foreign students $35.8 billion (2015) 4. Value of education export if indirect effects are added would be $50 billion (2015) 40% of universities already felt lower international student applications, 2017 The Export and Import of Education
Summary and Conclusions Article: Why Should We Restrict Immigration? Cato Journal, 32(1), Winter, 2012 Bryan Caplan - Professor of Economics at George Mason University Even if all the empirical claims are wrong, though, immigration restrictions would remain morally impermissible. Why? Because there are cheaper and more humane solutions for each and every complaint. If immigrants hurt American workers, we can charge immigrants higher taxes and admission fee, and use the revenue to compensate the losers. If immigrants burden American taxpayers, we can make immigrants ineligible for benefits. If immigrants hurt American culture, we can impose test of English fluency and cultural literacy. If immigrants hurt American liberty, we can refuse to give them the right to vote. Whatever your complaint happens to be, immigration restrictions are a needlessly draconian remedy.
Thank you! Any Questions?