Prepared Testimony of Steven A. Camarota
Director of Research Center for Immigration Studies
for the Immigration Integrity, Security, and Enforcement Subcommittee
of the House Judiciary Committee Hearing entitled
“The Impact of Illegal Immigration on Social Services”
Summary
Illegal immigrants are a net fiscal drain, meaning they receive more in government services than they pay in taxes. This result is not due to laziness or fraud. Illegal immigrants actually have high rates of work, and they do pay some taxes, including income and payroll taxes. The fundamental reason that illegal immigrants are a net drain is that they have a low average education level, which results in low average earnings and tax payments. It also means a large share qualify for welfare programs, often receiving benefits on behalf of their U.S.-born children. Like their less-educated and low-income U.S.-born counterparts, the tax payments of illegal immigrants do not come close to covering the cost they create.
• The current surge of illegal immigration is unprecedented. Some 2.7 million inadmissible aliens have been released into the country by the administration since January 2021. There have also been 1.5 million “got-aways” — individuals observed entering illegally but not stopped. Visa overstays also seem to have hit a record in FY 2022.
• We preliminarily estimate that the illegal immigrant population grew to 12.8 million by October of 2023, up 2.6 million since January 2021, when the president took office. This is the net increase in the illegal population based on monthly Census Bureau data, not the number of new arrivals.
• Illegal immigrants have a negative fiscal impact — taxes paid minus benefits received — primarily because a large share have modest levels of education, resulting in relatively low average incomes and tax payments, along with significant use of means-tested programs and other government services.
• Prior research indicates that 69 percent of adult illegal immigrants have no education beyond high school, compared to 35 percent of the U.S.-born.
• Using the National Academies’ estimate of immigrants’ net fiscal impact by education level, we estimate that the lifetime fiscal drain (taxes paid minus costs) for each illegal immigrant is about $68,000, although this estimate comes with some caveats.
• Illegal immigrants make extensive use of welfare. Based on government data, we estimate that 59 percent of households headed by illegal immigrants use one or more major welfare programs, compared to 39 percent of households headed by the U.S.-born.
• Based on their use rate of major welfare programs, we estimate that illegal immigrants receive $42 billion in benefits, or about 4 percent of the total cost of the cash, Medicaid, food and housing programs examined in our study. However, this is only a rough approximation due to limitations in the data.
• Illegal immigrants can receive welfare on behalf of U.S.-born children. Also, illegal immigrant children can receive school lunch/breakfast and WIC directly. A number of states provide Medicaid to some illegal immigrants, and a few provide SNAP. Several million illegal immigrants also have work authorization (e.g. DACA, TPS and some asylum applicants), allowing receipt of the EITC.
• The high welfare use of illegal immigrant households is not explained by an unwillingness to work. In fact, 94 percent of illegal immigrant households have at least one worker, compared to only 73 percent of U.S.-born households. But the nation’s welfare system is design to help low-wage workers with children, which describes a very large share of illegal immigrant households.
• In addition to consuming welfare, illegal immigration makes significant use of public education. Based on average costs per student, the estimated 4 million children of illegal immigrants in public schools created $68.1 billion in costs in 2019. The vast majority of these children are U.S.-born.
• Use of emergency medical services is another area in which illegal immigrants create significant fiscal costs. Prior research indicates that there are 5.8 million uninsured illegal immigrants in the country in 2019, accounting for a little over one-fifth of the total population without health insurance. The costs of providing care to them likely totals some $7 billion annually.
• Illegal immigrants do pay some taxes. We estimate that illegal immigrants in 2019 paid roughly $5.9 billion in federal income tax, $16.2 billion in Social Security tax and $3.8 billion in Medicaid taxes. However, as the net fiscal drain of $68,000 per person cited above indicates, these taxes are not nearly enough to cover the cost of the services they receive.
• Illegal immigrants do add perhaps $321 billion to the nation’s GDP, but this is not a measure of their tax contributions or the benefits they create for the U.S.-born. Almost all the increase in economic activity goes to the illegal immigrants themselves in the form of
wages.
Introduction
Congress set limits on legal immigration and has allocated funds to enforce those limits for good reason. Allowing widespread illegal immigration raises profound concerns about a host of issues, from public safety and national security to the impact on American workers and the rule of law. While these impacts are all important, my testimony focuses only on the impact of illegal immigration on public coffers. The ongoing border crisis and the dramatic increase in the illegal immigrant population in the last three years will come at a significant cost to taxpayers. By consuming scarce public resources also will make it more difficult to assist low-income legal immigrants and U.S.-born Americans.
In my testimony, I will address five major issues that relate to illegal immigration’s impact on taxpayers. First, I will discuss what the ongoing border crisis means for the growth in the size of the illegal immigrant population. Second, I will touch on the enormous strain this influx is creating in many American cities. Third, I will report the estimated education level of illegal immigrants and then use this information to estimate the lifetime net fiscal impact — all taxes paid minus all benefits received — of the average illegal immigrant. Fourth, I will then report some of the costs illegal immigration creates for key public services. Fifth, I will estimate the tax contributions of illegal immigrants from federal income, Social Security, and Medicaid taxes, which are by far the most important taxes that they pay. Finally, I will warn against conflating GDP growth with fiscal impact.
The Current Surge
Border Encounters and Aliens Released. From January 2021 to November 2023 there were nearly 8 million “encounters” at all U.S. borders.1 There has never been this many encounters over such a short period of time, which in the past were referred to as “apprehensions,” though there are some differences between the two terms. Court records and other information on the Department of Homeland Security (DHS) websites indicate that about 2.7 million inadmissible aliens have been released into the country since the start of the Biden administration.2 The decision to release these aliens represents new additions to the illegal immigrant population. Many of those released have pending asylum applications or are parolees, but they are still illegal immigrants because they have not been formally admitted to the U.S. and are subject to deportation under the Immigration and Nationality Act.
Got-Aways. In addition to those released into the interior of the country, there are so-called “got-aways, which according to DHS are “the number of subjects who, after making an unlawful entry, are not turned back or apprehended”. Prior to Covid-19, the number averaged about 128,000, and was roughly 137,000 in 2020. In 2021, the number more than doubled to 391,000.3 DHS has not published any newer numbers. However, Fox News has reported that there were 599,000 got-aways in FY 2022.4 Further, at a May press conference, Secretary Mayorkas seemed to confirm a reporter’s question that there had already been more than 530,000 got-aways in FY 2023 at that time.5 All told, there have been roughly 1.5 million got-aways since the president took office.6 On an annual basis, the number of got-aways in FY 2022 and 2023 is 4.5 times the average in the Trump administration’s first three years before Covid-19, when immigration temporarily plummeted.
Visa Overstays. A significant number of new illegal immigrants, and perhaps a majority before the current border surge, were admitted legally on a temporary visa or under the visa waiver program and then did not leave the country when the time limit expired. DHS for FY 2022 showed 850,000 foreign visitors overstayed in that year. The total overstay rate for 2022 was 3.67 percent, which is more than double the rate of recent years. Of course, not all of these individuals stay long term, and there is always some number of people who leave the country but whose departure was not properly recorded.7 Still, the current level of overstays is much higher than in 2021 and in the years before Covid-19.8
What the Monthly Census Data Shows. The largest Census Bureau survey that captures the foreign-born population is the American Community Survey (ACS), which is released annually and reflects the population in July of each year. The most recent ACS available is for 2022, so it is a year and a half out of date. This means it only partly captures the current surge in illegal immigration. However, the monthly Current Population Survey (CPS), which the Census Bureau collects for the Bureau of Labor Statistics, is released shortly after it is collected each month. It therefore provides the most up-to-date data available, though it is smaller than the ACS.
Estimating the Illegal Population in 2023. In a recent report for the Center for Immigration Studies my colleague Karen Zeigler analyzed the CPS and found that there were 49.5 million immigrants (legal and illegal together) in the country in October of 2023, up from 45 million in January of 2021. This increase is unprecedented.9 In September, I testified before the House Education and Workforce Committee that we preliminarily estimated that the illegal population grew from 10.2 million in January 2021 to 12.6 million by May 2023. These figures are based on the monthly CPS, but are adjusted for those missed by the survey. Unfortunately, not all of the administrative data on legal immigration is available to properly estimate illegal immigration through October 2023. But given the ongoing border crisis we have no reason to believe that things have changed significantly since May. If that is correct, then about 2.5 million of the 4.5 million increase in the foreign-born in the CPS from January 2021 to October 2023 is due to illegal immigration, before adjusting for undercount. Adjusted for undercount, the illegal population has likely grown to 12.8 million in October of this year, up from 2.6 million from 10.2 million in January 2021 when the president took office.
Critically, all of these numbers represent a net increase. The number of new arrivals is larger but is always offset by outmigration (including deportations), natural mortality, and in the specific case of illegal immigrants, legalizations (e.g., successful asylum applicants and marriage to an American). It should also be noted that our January 2021 estimate of 10.2 million represented a low point after Covid. In 2019, we estimate the illegal population was 11.5 million. So relative to the number before Covid, the current total and growth is large but not dramatically so. Finally, it must be emphasized that our new estimates are all still only preliminary.10
The Fiscal Impact of Illegal Immigration
Unfortunately, there has not been enough time to estimate all the fiscal effects of the recent influx. But based on statements and publicly available information we know that many jurisdictions in the U.S. are struggling with the cost of providing services to new illegal immigrants.
Cost for New York City. At a town hall meeting in September last year, Mayor Eric Adams stated that the huge influx of illegal immigrants “will destroy New York City” due to the costs the city is incurring to provide for them.11 The city expects to spend $12 billion over the next three years on housing, food, health care and other services for recently arrived illegal immigrants.12 In order to come up with the money to cover these new costs, the city plans to cut the budget by 5 percent across a range of services, including sanitation, public education, and the police department.13 Obviously, the fiscal drain from illegal immigration must ultimately result in either fewer services or higher taxes for American citizens.
Cost Outside of New York. The estimated cost of accommodating recently arrived illegal immigrants in Chicago in 2023 alone will be $361 million.14 By the end of FY 2023, the District of Columbia expected to have spent $36.4 million on various services for illegal immigrants.15 Denver mayor Mike Johnston recently told city councilmembers that the city will likely spend $180 million on the illegal influx in the coming year – more than triple what it spends on the homeless.16 A report from the state of Massachusetts in December of last year shows that the state expects to spend $2 billion in the next two years fundings its emergency shelter system, with illegal immigrants accounting for half of those needing services.17 Other localities such as El Paso, Los Angeles, and Philadelphia are all struggling to provide services to newly-arrived illegal immigrants.
The Education Level of Illegal Immigrants. Educational attainment is a key factor when considering illegal immigrants’ effect on public coffers because it determines what type of jobs they typically do and their resulting income. Income matters enormously because it affects both tax payments and eligibility for means-test government programs. Averaging estimates from the Migration Policy Institute (MPI) and the Center for Migration Studies (CMS) indicates that 43 percent of illegal immigrants have less than a high school diploma, 25 percent have only a high school education, 13 percent have some college, and 18 percent have at least a bachelor’s.18 Based on the citizenship of individuals encountered at the border and Census Bureau data from 2023, the new illegal immigrants now settling in the U.S. as a result of the current border crisis also likely have similarly modest levels of education, though we cannot say this for certain.19
The Challenge of Estimating Fiscal Effects. Calculating the current fiscal impact of immigration requires numerous decisions about how to allocate various costs. Even more challenging are long-term fiscal estimates, which require making assumptions about the state of the economy and government finances well into the future. The results of any analysis will obviously vary depending on the assumptions.
The National Acadamies’ 2017 Fiscal Study. A 2017 study by the National Academies of Sciences, Engineering, and Medicine projected the lifetime fiscal impact (taxes paid minus services used) of immigrants by education. These estimates are expressed as a net present value (NPV).20 The Academies’ 2017 study does not report separate estimates for illegal and legal immigrants. Rather, it simply estimates tax payments and expenditures on immigrants based mainly on the CPS Annual Social and Economic Supplement, which includes both legal and illegal immigrants. The study’s fiscal projections include eight different scenarios, based on different assumptions about things like future spending and tax rates. The 2017 study does not identify which scenario is most likely.
Net Fiscal Impact of Illegal Immigrants. We can use the Academies’ estimates to get a reasonable idea of the likely fiscal impact of illegal immigrants. In a 2017 analysis, I averaged the results of the Academies’ eight fiscal scenarios to get one estimate for each educational category. I follow the same approach in the table below.21 Using these fiscal estimates and taking a weighted average of the education level of illegal immigrants reported by MPI and CMS, and adjusting the National Academies’ figures for inflation and legality, produces a lifetime NPV of the average illegal immigrant of negative $68,390 in 2023 dollars.22
The above estimate comes with caveats. First, the Academies’ estimates are for all immigrants; though we do include an adjustment to take this issue into account.23 Further, the long-term fiscal situation for the country has deteriorated significantly since 2012, the base year the Academies used for its estimate.24 This means the fiscal impact of those with lower levels of education, as well as the average taxpayer has become even more negative.
Read Full Hearing Testimony By Steven A. Camarota: The Cost of Illegal Immigration to Taxpayers
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