The labor market impact of deportations

Immigration is one of the most important topics in this presidential election cycle. Former President Trump has promised to conduct a massive deportation effort that would remove millions of people per year. The latest statistics show about 11 million unauthorized immigrants are living in the U.S., and several million more people have arrived in the past two years on parole or with an uncertain legal future. Would a mass deportation effort improve the U.S. economy and provide more jobs for U.S.-born workers? Recent, rigorous economics research sheds light on the consequences of increasing the number of deportations on the U.S. labor market. This research consistently points to deportations hurting the U.S. labor market and leading to worse labor market outcomes for U.S.-born workers.

Landscape of deportations in the US

A deportation is a mandatory departure of a noncitizen out of the U.S. based on a formal order of removal. Official estimates of the cost of deportations are scarce but the best estimates suggest that each deportation costs about $13,000 in current dollars.

There has been a dramatic increase in the number of deportations in the U.S. in the last few decades. Deportations, including removals at the border and those from the interior, increased from about 200,000 per year in the early 2000s to 400,000 per year in the late 2000s. Deportations were then steady at about 300,000 per year until the COVID-19 pandemic. Since the pandemic, deportations of long-term residents have fallen, but other types of removals from the U.S. increased, especially at the border.

A real-world test of the effects of deportation

To isolate the causal effects of deportations on the economy, economists study the rollout of an immigration enforcement policy called Secure Communities (SC). The Secure Communities program increased information sharing between local law enforcement agencies and Immigration and Customs Enforcement (ICE) with the express purpose to identify and deport people who were in the U.S. without authorization. About 400,000 people were deported under SC between 2008 and 2014, after which SC was replaced with the Priority Enforcement Program (PEP). While the first counties implemented SC in 2008, it was implemented county by county with the last counties implementing the program in 2013. The timing of enactment was based on how close the counties were to ICE offices and how quickly the technology could be set up in a county. Bottlenecks in implementation meant some counties were put on waitlists. Because of this, the exact timing of when a county implemented SC was out of their direct control, and counties that adopted the program early compared to late are otherwise very similar. Thus, researchers can compare the labor market outcomes in counties that implemented SC earlier compared to later.

While only people who were arrested had their immigration status checked under SC, the policy nonetheless impacted a large portion of immigrants. There were broad “chilling effects” of the policy that meant even people not targeted for deportation became fearful of leaving their house to do routine things like go to work. This is partly because the program did not only target serious criminals—the most serious criminal conviction for 79% of those deported was non-violent, including traffic violations and immigration offenses, and another 17% were not convicted of any crime.  

Increased deportation is associated with poorer economic outcomes for US-born workers 

Across multiple studies, economists have found that once SC is implemented, the number of foreign-born workers in that county declines and the employment rate among U.S.-born workers also declines. My research with Annie Hines, Philip Luck, Hani Mansour, and Andrea Velásquez finds that when half a million immigrants are removed from the labor market because of enforcement (due to deportations and indirectly due to chilling effects), this reduces the number of U.S.-born people working by 44,000.

Why do deportations hurt the economic outcomes of U.S.-born workers? The prevailing view used to be that foreign-born and U.S.-born workers are substitutes, meaning that when one foreign-born worker takes a job, there is one less job for a U.S.-born worker. But economists have now shown several reasons why the economy is not a zero-sum game: because unauthorized immigrants work in different occupations from the U.S.-born, because they create demand for goods and services, and because they contribute to the long-run fiscal health of the country.

First, unauthorized immigrant workers and U.S.-born workers work in different types of jobs. Figure 1 shows the percentage of unauthorized immigrant workers, authorized immigrant workers, and U.S.-born workers that are in each of the 15 most common occupations among unauthorized immigrants.

It is clear that unauthorized immigrants take low-paying, dangerous and otherwise less attractive jobs more frequently than both U.S.-born workers and authorized immigrant workers. For example, almost 6% of unauthorized immigrants work as housekeepers, construction laborers, or cooks, compared to about 2% of authorized immigrant workers and 1% of U.S.-born workers (See Figure 1).

Occupations common among unauthorized workers, such as construction laborers and cooks, are essential to keep businesses operating. Deporting workers in these jobs affects U.S.-born workers too. For example, when construction companies have a sudden reduction in available laborers, they must reduce the number of construction site managers they hire. Similarly, local restaurants need cooks to stay open and hire for other positions like waiters, which are more likely to be filled by U.S.-born workers.

Caregiving and household service jobs are also common among unauthorized immigrants. The availability and cost of these services in the private market greatly impacts whether people can work outside the home. My research with Andrea Velásquez and new research by Umair Ali, Jessica Brown and Chris Herbst find that Secure Communities impacted the childcare market—the supply of childcare workers fell. This led to a reduction in the number of college-educated mothers with young children working in the formal labor market.

Several recent Brookings pieces have highlighted the role that immigrants play in caregiving jobs, which are becoming increasingly important as the U.S. population ages. These pieces call for increasing the number of legal pathways for immigrants willing to work in these types of jobs to come to the U.S.

Another important way in which immigrants help create jobs for U.S.-born workers is that unauthorized immigrants contribute to local demand for goods and services like haircuts, food, and cars. This means deportations lead to less revenue for local barber shops, grocery stores, and auto dealerships, causing them to hire fewer workers, including U.S.-born workers.

Finally, deportations impact tax revenue and the fiscal health of the federal, state, and local governments. A comprehensive study by the National Academies of Sciences, Engineering, and Medicine found that, in a given year, each foreign-born person and their dependents pay on average $1,300 more in federal taxes than they receive in federal benefits, and, looking over a 75-year time horizon, immigrants are a net fiscal positive at all levels—they pay $237,000 more in taxes over their lifetime than they receive in benefits from federal, state, and local governments. While these estimates are not broken out by immigration status, the study indicates that the net fiscal impacts of unauthorized immigrants are larger than authorized immigrants because unauthorized immigrants are more likely to be of working age. Thus, deportations reduce tax revenue both because of a reduction in taxes paid by unauthorized immigrants, and through a reduction in taxes paid by U.S.-born workers who lose their jobs.  Unauthorized immigrants and their children also facilitate the solvency of the Social Security and Medicare systems by paying into these systems when they are not eligible to receive any benefits.

Implications for policy

Immigration law has not been comprehensively updated for 34 years and as a result is designed for an outdated labor market and an outdated demographic reality.  With so much political discussion about immigration this year, it’s important to understand the role of unauthorized immigrant workers in the U.S. economy. Recent economics research shows that unauthorized immigrant workers help to create more jobs for U.S.-born workers. Large-scale deportation efforts would be very disruptive in some industries and would hamstring the current growth in employment, which has been driven in large part by increased immigration. Instead, Congress should set its sights on reform and expansions in legal immigration pathways.