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The Economic Effects of Providing Legal Status to DREAMers

Author

Listed:
  • Ortega Francesc

    (Dina Axelrad Perry Professor of Economics, Queens College. CUNY, 65-30 Kissena Blvd, Flushing, NY11367, USA)

  • Edwards Ryan

    (Research Associate, Berkeley Population Center, UC, Berkeley, CA, USA)

  • Hsin Amy

    (Associate Professor of Sociology, Queens College, CUNY, NY, USA)

Abstract

This study quantifies the economic effects of two major immigration policies 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, whereas 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 that DACA increased gross domestic product (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 those that increase their educational attainment. Because of the small size of the DREAMer population, and their skill distribution, 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 Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-18, June.
    • Handle: RePEc:vrs:izajlp:v:9:y:2018:i:1:p:18:n:5
    DOI: 10.2478/izajolp-2019-0005
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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. Battaglia, Emily, 2023. "Did DACA Harm US-Born Workers? Temporary Work Visas and Labor Market Competition," Journal of Urban Economics, Elsevier, vol. 134(C).
    3. Ortega, Francesc & Hsin, Amy, 2018. "Occupational Barriers and the Labor Market Penalty from Lack of Legal Status," IZA Discussion Papers 11680, IZA Network @ LISER.
    4. 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).
    5. 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.
    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.

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    Keywords

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    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J1 - Labor and Demographic Economics - - Demographic Economics

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