White House Points to Decades-old Data on Immigration Benefits

Other studies show immigration reduces wages, employment

• November 21, 2014 2:03 pm


The White House on Friday partially relied on data from a contested decades-old study to tout the economic benefits of President Obama’s executive order on immigration.

A press release from the Obama administration argued that the president’s plan—which defers deportation and grants work permits to as many as 5 million undocumented immigrants—will modestly boost total economic output and annual wages for U.S.-born workers by 2024. His actions will also have a negligible effect on the employment rates of native workers, the release said.

Damian Paletta with the Wall Street Journal noted that the White House relied on data from its Council of Economic Advisers (CEA). Numerous studies offer conflicting evidence about the effects of immigration on the wages and employment of U.S.-born workers.

Critics will likely try and poke holes in the CEA’s findings, as it reflects a combination of anecdotal studies stretching back decades and concrete mathematical formulas.

In calculating future GDP changes, the CEA used at least two complex mathematical equations, showing, for example, how the GDP would be affected given a larger labor force as well as working-age population.

But other conclusions were based on past research. For example, its determination that the immigration changes will have "no net effect on the likelihood of employment of native workers in the long run" was based in part on a study of an influx of Cuban immigrants to Miami in 1980.

Some experts have questioned the reliability of the older Miami study. George Borjas, a leading immigration economist at Harvard University, said in a 2013 review of academic research on immigration that "cross-city comparisons do not seem to measure the labor market impact resulting from an immigration-induced supply shift."

After examining data from 1990 to 2010, Borjas found that immigrants reduced the average annual earnings of American workers by $1,396 in the short term.

When workers are categorized by education level and age, a 10 percent increase in the size of a group (from both legal and illegal immigrants) reduces the wages of all native-born workers by 2.5 percent, according to Borjas.