What Are The Costs Of Amnesty?

The Heritage Foundation’s Jim DeMint and Robert Rector, in a recent WaPo op-ed, cite a recent Heritage study to argue that extending amnesty to “unlawful immigrants” would cost taxpayers $6.3 trillion. Yglesias isn’t buying it:

The study starts by simply ignoring large swathes of the bill. There’s no W Visa program here. No replacement of the Diversity Visa Lottery with a new points-based program. No expansion of H1-B, no reform of the treatment of spouses of skilled green card holders. There’s nothing but amnesty for undocumented workers presently residing here. They tally up the taxes likely to be paid by the typical undocumented worker (low because he’s poor) and compare them to the cost of public services associated with each person. This latter is high because Heritage mixes and matches its methodology. When it comes to means-tested benefits, they do an individualized analysis at the margin so one extra low-income person costs however much it would cost to sign up an extra person for SNAP. But when it comes to general public services, they do a population average method. …

[Another] assumption here is that granting legal status to unauthorized workers will have no economic value to the workers. If that were true, it would be hard to understand why we’d even be having this debate.

Jenn Rubin passes along conservative criticisms of the op-ed. Reason’s Shikha Dalmia is also critical:

There is a vast and rich economics literature on this subject that Rector seems to be quite innocent of. Plenty of studies have found that immigrants don’t depress but stimulate the labor market for natives because they allow more businesses to form. As for the wage effects, even restrictionists’ favorite economist George Borjas’ 2003 paper failed to find any. Borjas disaggregated the impact of low skilled immigration on different native groups and found that, over the long run, the overall impact on their wages was zero. Only one group, high school dropouts, felt a noticeable negative impact. However, a subsequent study by Giovanni Peri and Gianmarco Ottaviano failed to corroborate Borjas’ findings even for native high-school dropouts. They found a positive long-run effect of 0.3 percent. In other words, no one — not even high school dropouts lose in the long run due to low-skilled immigration.

DiA shows how Rector and DeMint are out of step with Milton Friedman on the matter.