Illegal immigration has been a source of increasing concern for economists in the United States. During the last ten years, the population of illegal immigrants in the US has increased from five million to the current 11.7 million; an issue which has prompted angry charged that the country has lost control over its borders. The most issue of importance and also which is debated avidly is about the impacts of the illegal immigration on the economy of the United States. The more than 11 million illegal immigrants in the US today and the impact they have on the economy can be perceived to be both positive and also negative (Johnson, 2013). Claims are abound. Some argue that immigrants come to the US with the aim of having babies who will acquire US citizenship. However, research has indicated that many of the illegal immigrants come to the US primarily for economic reasons. The overall impacts are unclear and the paper aims at presenting and analyzing both sides of the debate.
There are various reasons to be concerned in regard to the increasing levels of illegal immigration. However, as the Congress considers the biggest changes to the immigration laws, it is critical not to lose the sight of the fact that illegal immigration contains clear economic logic: providing business in the US with the variety of workers they need, when they need them, and the location they need them (Hanson, 2009). If the policy reforms succeed in ensuring the US illegal immigrants more similar to legal immigrants in relation to skills, occupational mobility, and timing of arrival, it is expected to cause a decline instead of increasing the national welfare. The Congress as well as the administration requires being cautious that the economic costs do not outdo the putative benefits in their efforts in gaining control over the issue of illegal immigration.

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In general, illegal immigration increases the incomes of the United States residents by allowing the economy to make efficient use of the domestic resources. However, since immigrants of different forms have varying levels of skills, family size, income-earning, and rights to access public services, the changes in their respective income inflows have different impacts on the economy. Illegal immigration also impacts the US incomes through its effects on public expenditure and tax revenues (Hanson, 2009). Illegal immigrants with low income and large families tend to cause a bigger drain on the public spending. Illegal immigrants pay income, sales, property, payroll as well as other taxes with the lower-skilled immigrants hence making smaller contributions. The illegal immigrants make use of public services by sending their children to public schools, driving on the roads and highways, demanding the protection of the police and the fire department, and receiving assistance from the state and the federal government. Making an addition of the pretax income gains from the immigration to the net tax contributions of immigrants, their tax payments is less the value of the government services they utilize allowing for a rough approximation of the total impact of the immigration on the US economy.

Illegal immigrants generate extra income for the economy of the country, even as it causes the drop of wages for some workers. Illegal immigrants increase the supply of labor, raise productivity of resources hence complementing labor. The influx of more workers enables the US capital, natural resources, and land to be exploited in a more efficient manner. The yearly surplus of illegal immigrants into the US looks to be small, which is equivalent to an estimated 0.2 percent of the GDP in 2004 (Camarota, 2013). However, the benefits are not equally shared. The labor influx provided by illegal immigrants from other countries cause a redistribution of income away from the workers competing with the immigrants in the labor market. On the other hand, illegal immigration admits large numbers of individuals with low skills and who can exacerbate inefficiencies linked to the public finance system of the country. When the illegal immigrants pay more in terms of taxes that they are able to receive in form of government benefits, then illegal immigration generates a total fiscal transfer to the native taxpayers (Johnson, 2013). The sum effects of illegal immigration on the US residents, the total of the illegal immigration surplus as well as the total fiscal transfer from the immigrants would be clearly positive. This looks to be a case for the illegal immigrants having high levels of skills, giving a suggestion that the employment based permanent immigrants as well as the highly skilled temporary immigrants possess positive total effects on the US economy (Costa, 2014). They help in generating a positive immigration surplus through the increase in the US productivity as well as making a positive total tax contribution through addition to the United States government coffers. However, if the illegal immigrants pay less in form of taxes they receive from the government benefits, then illegal immigration generates a net fiscal burden on the native taxpayers.

Changing the US immigration policy which is currently being contemplated by the Congress is expected to slow the illegal immigrants’ influx into the United States. It is anticipated that the policies will help in tightening the enforcement against the illegal immigration, help in expanding the number of temporary work visas which are available to guest workers, as well as revising the provisions for illegal immigrants to acquire legal status (Costa, 2014). The members of the Congress and including the policy makers are agreeing that putting enforcements on the border and the interior of the country needs to be expanded. Similarly, the subject of allowing legal immigration rather than illegal immigration is raising a lot controversy. Through the immigration policies, what does the US hope to achieve economically? According to Martin (2010), the optimal immigration policy should be committed in admitting only the individuals who are skilled and who can contributes tax to the economy. However, it is important to take into consideration the rule of and strengthening the ability of the US government in enforcing regulations on the labor market. One of the most divisive issues in regard with the issue of immigration involves offering the illegal immigrants an opportunity to legalize their status in the US. One of the views is that there exists no other means except for politically undesirable mass deportations in order to reduce the total number of illegal aliens in the United States. In addition, the view of legalizing unauthorized entrants will reward the people who broke the law and also create incentives for continued illegal immigration in the coming future.

In a nutshell, even though some specific groups of employers, workers, and taxpayers may gain or loss of the policies governing illegal immigration is altered, the average economic impacts of policy reforms does not appear to be significant. Generally, Illegal immigration increases the incomes of the United States residents by allowing the economy to make efficient use of the domestic resources but also raises debate on the net fiscal income illegal immigration has on the US economy. Illegal immigrants generate extra income for the economy of the country, even as it causes the drop of wages for some workers. Therefore, the policymakers should separate the distributional effects of illegal immigration from its aggregate impacts and also consider that the overall impacts are unclear.

  • Johnson, H. (2013). Illegal immigration. Retrieved November 22, 2015 from
  • Hanson, G. (2009). The Economics and Policy of Illegal Immigration in the United States. Migration Policy Institute
  • Camarota, S. (2013). The Fiscal and Economic Impact of Immigration on the United States. Retrieved November 22, 2015 from
  • Costa, D. (2014). Facts About Immigration and the U.S. Economy. Economic Policy Institute. Retrieved November 22, 2015
  • Martin, J. (2010). The fiscal burden of illegal immigration on United States Taxpayers. Retrieved November 22, 2015 from