Multi-American | How immigrants are redefining 'American' in Southern California

The Dream Act and the economy

Photo by sea turtle/Flickr (Creative Commons)

Senate Democrats speaking in support of a newly introduced version of the Development, Relief and Education for Alien Minors (DREAM) Act this morning have been bringing up economic reasons for passing the proposed legislation, which would grant conditional legal status to young people brought here before age 16 if they go to college or enlist in the military.

During a Senate subcommittee hearing on the bill, California's Sen. Dianne Feinstein cited a report by the North American Integration and Development Center at UCLA, released late last year as the most recent version of the bill was being considered. The report concluded that if an estimated 825,000 now-undocumented youths who stand to benefit from the Dream Act were allowed to contribute to the economy, they would generate an estimated $1.4 trillion current dollars in income over 40 years. An excerpt from that report:

In this study, we examine two scenarios. In the first, we calculate the income that the lower-bound estimated 825,000 beneficiaries would generate over a 40-year period, representative of the work life of a 25- to 65-year-old employed individual. In our second scenario, called “No DREAMers Left Behind,” we analyze the income that would be generated in the same 40-year period if the entire group of 2.1 million potential beneficiaries could successfully meet the education or military service requirement.

By observing the educational attainment of the Latino population (which represents over 80 percent of the total potential beneficiary cohort, according to the MPI) and applying those trends to the 825,000 eligible individuals in the MPI scenario, our study concludes that the income generated over 40 years would be $1.4 trillion in current dollars (actual income would be significantly higher if inflation over 40 years is taken into account).

In the No DREAMers Left Behind scenario, 2.1 million undocumented immigrants would become legalized and generate approximately $3.6 trillion over the same 40-year period (also in current dollars).

The UCLA report also pointed out a potential advantage for U.S. taxpayers, with the legislation representing a return on "our current, and already spent, investment in youths that the public school system educates in their K-12 years.”

There were other assessments of the Dream Act's economic impact last year as the previous version - only slighty different from the current one - came up for a vote. Among them was a Congressional Budget Office report that concluded that over the next 10 years, as the bill increased the number of authorized workers in the country, revenues would increase by $2.3 billion and the national deficit would decrease by $1.4 billion.

However, the CBO report also predicted that as beneficiaries' conditional legal status gave way to permanent legal status, they would qualify like other U.S. legal residents and citizens for government programs, adding to the deficit in the long run.

Another report from the Center for Immigration Studies, an immigration-restriction advocacy organization, cited a potential cost of $6.2 billion a year in tuition subsidies if the bill were to become law. However, the report was based on the assumption that Dream Act students would pay cheaper in-state college tuition. The latest version of the bill includes a provision that would repeal a ban on in-state tuition, but the decision to grant in-state tuition to undocumented students is currently left to individual states.

The Dream Act is being heard in a Senate subcommittee this morning.