The Economic Benefits of Comprehensive Immigration Reform

Abstract

In this article, I use a computable general equilibrium (CGE) model to estimate the economic ramifications of three different scenarios: (1) comprehensive immigration reform that creates a pathway to legal status for unauthorized immigrants in the United States and establishes flexible limits on permanent and temporary immigration that respond to changes in U.S. labor demand in the future; (2) a program for temporary workers only that does not include a pathway to permanent status or more flexible legal limits on permanent immigration in the future; and (3) mass deportation to expel all unauthorized immigrants and effectively seal the U.S.-Mexico border. In addition to the national-level analysis, I look at the effect of the two extremes of immigration reform (scenarios 1 and 3) on Arizona and California, the former because mass depletion of the immigrant workforce is a real threat in light of S.B. 1070, and the latter because it is home to more immigrants than any other state. Within California, I focus on Los Angeles County to see the effects of the different reform scenarios at the local level.

Keywords: economic impact of immigrant workers, U.S. immigration system, green card, temporary visa, Mexican immigration, low skilled workers

JEL Classification: K37, J15, J61