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The Economic Effects of Providing Legal Status to DREAMers

Author

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  • Ortega, Francesc

    (Queens College, CUNY)

  • Edwards, Ryan

    (University of California, Berkeley)

  • Hsin, Amy

    (Queens College, CUNY)

Abstract

This study quantifies the economic effects of two major immigration reforms aimed at legalizing undocumented individuals that entered the United States as children and completed high school: Deferred Action for Childhood Arrivals (DACA) and the DREAM Act. The former offers only temporary legal status to eligible individuals; the latter provides a track to legal permanent residence. Our analysis is based on a general-equilibrium model that allows for shifts in participation between work, college and non-employment. The model is calibrated to account for productivity differences across workers of different skills and documentation status, and a rich pattern of complementarities across different types of workers. We estimate DACA increased GDP by almost 0.02% (about $3.5 billion), or $7,454 per legalized worker. Passing the DREAM Act would increase GDP by around 0.08% (or $15.2 billion), which amounts to an average of $15,371 for each legalized worker. The larger effects of the DREAM Act stem from the expected larger take-up and the increased incentive to attend college among DREAMers with a high school degree. We also find substantial wage increases for individuals obtaining legal status, particularly for individuals that increase their educational attainment. Because of the small size of the DREAMer population, legalization entails negligible effects on the wages of US-born workers.

Suggested Citation

  • Ortega, Francesc & Edwards, Ryan & Hsin, Amy, 2018. "The Economic Effects of Providing Legal Status to DREAMers," IZA Discussion Papers 11281, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11281
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    Cited by:

    1. Giuntella, Osea & Lonsky, Jakub & Mazzonna, Fabrizio & Stella, Luca, 2021. "Immigration policy and immigrants’ sleep. Evidence from DACA," Journal of Economic Behavior & Organization, Elsevier, vol. 182(C), pages 1-12.
    2. Amy Hsin & Francesc Ortega, 2018. "The Effects of Deferred Action for Childhood Arrivals on the Educational Outcomes of Undocumented Students," Demography, Springer;Population Association of America (PAA), vol. 55(4), pages 1487-1506, August.
    3. Battaglia, Emily, 2023. "Did DACA Harm US-Born Workers? Temporary Work Visas and Labor Market Competition," Journal of Urban Economics, Elsevier, vol. 134(C).
    4. Ortega, Francesc & Hsin, Amy, 2018. "Occupational Barriers and the Labor Market Penalty from Lack of Legal Status," IZA Discussion Papers 11680, Institute of Labor Economics (IZA).
    5. Giuntella, Osea & Lonsky, Jakub, 2020. "The effects of DACA on health insurance, access to care, and health outcomes," Journal of Health Economics, Elsevier, vol. 72(C).
    6. Gihleb, Rania & Giuntella, Osea & Lonsky, Jakub, 2023. "Dreaming of leaving the nest? Immigration status and the living arrangements of DACAmented," European Economic Review, Elsevier, vol. 156(C).
    7. Amuedo-Dorantes, Catalina & Borra, Cristina & Rivera-Garrido, Noelia, 2023. "‘No one size fits all’: Diverse impacts of Temporary Protected Status on Haitians and Hondurans," Economics Letters, Elsevier, vol. 228(C).
    8. Chro Hama Radha, 2023. "Retrofitting for Improving Indoor Air Quality and Energy Efficiency in the Hospital Building," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    9. Rania Gihleb & Osea Giuntella & Jakub Lonsky, 2022. "Dreaming of Leaving the Nest? Immigration Status and the Living Arrangements of DACAmented," Working Papers 202202, University of Liverpool, Department of Economics.

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    More about this item

    Keywords

    immigration; DREAMers; legalization; undocumented;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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