The Economic Logic of Illegal Immigration

"This Council Special Report addresses the economic logic of the current high levels of illegal immigration. The aim is not to provide a comprehensive review of all the issues involved in immigration, particularly those related to homeland security. Rather, it is to examine the costs, benefits, incentives, and disincentives of illegal immigration within the boundaries of economic analysis. From a purely economic perspective, the optimal immigration policy would admit individuals whose skills are in shortest supply and whose tax contributions, net of the cost of public services they receive, are as large as possible. Admitting immigrants in scarce occupations would yield the greatest increase in U.S. incomes, regardless of the skill level of those immigrants. In the United States, scarce workers would include not only highly education individuals, such as the sofware programmers and engineers employed by rapidly expanding technology industries, but also low-skilled workers in cons e of legal immigration to the U.S. unemployment rate. Two thirds of legal permanent immigrants are admitted on the basis of having relatives in the United States. Only by chance will the skills of these individuals match those most in demand by U.S. industries. While the majority of temporary legal immigrants come to the country at the invitation of a U.S. employer, the process of obtaining a visa is often arduous and slow. Once here, temporary legal workers cannot easily move between jobs, limiting their benefit to the U.S. economy" -- p.3-5