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Economics Research Institute Study Paper




Utah State University Department of Economics

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Illegal immigration imposes large economic costs on U.s. taxpayers. The costs are disproportionately concentrated on citizens of southern border states and of other states in which illegal immigrants concentrate. The illegal immigrants themselves also suffer significant costs of migration, such as monetary payments for transportation to or across the border and physical costs, including death. These costs, as well as the benefits to the economy of the illegal immigrant labor force, have been the subject of heated political debate, and polls show that Us. citizens place the issue of immigration at or near the top of the list of domestic problems that must be addressed. The issue of illegal immigration, particularly from Mexico, is doubly important, in that it is also perceived as a national security problem. Dealing with illegal immigration is a thorny political problem, since both political parties seek to curry favor with the Hispanic population, which is now the largest Us. minority community. Hence, Congress has been reluctant to take drastic action to strengthen border security or to enforce immigration law on illegal immigrants already in the United States unless they commit felonies. This study looks at the impacts on the United States and on potential immigrants of a legal market for immigration into the U. S. The current immigration laws and regulations are summarized, and rules for an immigration market are identified. The basic provision of a market for immigration would allow individuals who qualified for immigration to the United States under current laws and quotas, and who had been awarded legal immigrant status, to sell their right to immigrate to others who could qualify under the law, but who had not completed the process to obtain legal immigrant status. The effects of those structures and rules on legal and illegal immigration are analyzed in the context of economic efficiency and equity. Estimates of the impact of a market for immigration on costs and benefits of immigration, including illegal immigration, are provided, and policy recommendations are identified.