Staff: Sebastian Mallaby, Director of the Maurice R. Greenberg Center for Geoeconomic Studies and Paul A. Volcker Senior Fellow for International Economics
Author: Gordon H. Hanson, Professor of Economics, University of California, San Diego
January 2006 - April 2007
Immigration is a toxic political issue in the United States. This report by University of California, San Diego, professor Gordon Hanson indicates that the economic costs of illegal immigration roughly match the economic benefits. That is, the net economic impact of illegal immigration is close to zero. Thus, the political debate must revolve around how other sources of costs, or efforts to curb illegal immigration, such as increased border enforcement, would result in a net loss to the U.S.economy. He also finds that illegal immigration provides a labor supply that more closely tracks shifts in the need for labor across time and geography, while legal immigration—even when temporary—cannot keep up with these cyclical shifts. Any policy aimed at addressing the demand for low-skilled labor must also address the need for flexibility.
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