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DREAM Act Study Finds Potential Windfall

Undocumented Immigrant Students Could Pump Billions Into U.S. Economy

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One of the questions people on all sides of the immigration issue ask is what would the economic impact of the DREAM Act be?

If the children of illegal immigrants were allowed to pay reduced in-state college tuition rates, what would that mean for the country?

In 2010, UCLA professor Dr. Raul Hinojosa-Ojeda published a comprehensive study that sought to answer those questions with careful projections and reliable numbers.

Hinojosa-Ojeda found that the benefits of the DREAM Act could contribute as much as 3.6 trillion dollars to the U.S. economy over the next 40 years. Or, on an annual basis, $90 billion and about .6% of the national gross domestic product.

Hinojosa’s study is based on information from the Migration Policy Institute, which has estimated that roughly 2.1 million undocumented immigrants between the ages of 18 and 34 could qualify for DREAM Act legalization. Hinojosa’s study also assumed, however, that only about 38% of those eligible, or some 825,000 undocumented immigrants, actually would apply and then receive benefits under the proposed law.

The study concluded that extending education benefits to motivated immigrants would enhance the nation’s competitive position and create a new class of taxpayers who have the skills to contribute to the economy.

“Passing the DREAM Act enhances national economic earnings by developing a highly-educated workforce that will contribute trillions of dollars to the U.S. economy,” Hinojosa wrote. “A higher supply of skilled students would also advance the U.S. global competitive position in science, technology, medicine, education and many other endeavors.”

Hinojosa’s researchers at the university’s North American Integration and Development Center investigated two scenarios. In the first, they calculated the earnings that the 825,000 beneficiaries would generate over a period of 40 years. In the second, which they called, “No DREAMers left Behind,” they calculated the income that all 2.1 million beneficiaries would generate over the same span, after they had satisfied the law’s requirements for education or military service.

In the first scenario, the study found the 825,000 who were actually likely to apply for the benefits would contribute $1.4 trillion — in personal income — to the U.S. economy. In the second scenario, the entire group of 2.1 million undocumented immigrant students could generate $3.6 trillion.

Simply put, with better educations, these immigrants earn more, pay more in taxes, require less or no public assistance, and contribute more to the country.  

"This analysis shows that it is clearly in the nation's interest to enhance the possibilities that as many youth as possible take advantage of the DREAM Act and thus increase the potential benefit to the overall economy," Hinojosa wrote. "DREAMers make up a highly educated and potentially high-income earning group that can contribute billions of dollars to the U.S. economy across diverse industries.”

Approximately 65,000 students that would qualify for the DREAM Act graduate high school each year, according to the National Immigration Law Center.  

The study’s authors said their work probably required upward revisions because the results “represent only a subset of the full economic contribution of the DREAM Act beneficiary cohort. These calculations do not include total direct value added or indirect value added impacts.”

The researchers said there is no doubt the law would be good for U.S. taxpayers who would collect collateral benefits from the contributions of productive, financially independent immigrants.

“Beyond the direct and indirect economic impacts of a more productive, legal workforce, the DREAM Act represents an opportunity for American taxpayers to significantly increase the return on our current, and already spent, investment in youths that the public school system educates in their K-12 years,” the researchers wrote. “It is common sense to create legislative and policy mechanisms to better ensure an economic return on this taxpayer investment.”

Besides Hinojosa, who is the center’s director and founder, the other researchers included Paule Cruz Takash, the center's research director, and a group of undergraduate students and one alumna.

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