Essa apresentacao ilustrates o argumento delineado no paper com o mesmo titulo com copia tambem neste site.

1. CONTRIBUTIONS OF
IMMIGRANT LABORTOTHE
AMERICAN ECONOMY– A
DIFFERENTTAKE
Alvaro Lima
10/08/2016

2. AGENDA:
I. A Few Initial Points
II. The Processes of Production, Re-production of Capital & Labor
III. The Size & Educational Characteristics of the U.S. Immigrant Labor Force (2000
– 2009)
IV. Calculating Direct, Indirect & Induced Net Contribution of Labor
 Immigrant Contribution as Workers
 Immigrant Contribution as Consumers
 Immigrant Contribution as Taxpayers
 Costs Related to Uncompensated Care & Second Generation Education Costs
V. Costs and Benefits - A Balance
VI. Back to the Main Point of the Paper

3. I - A Few Initial Points:
 The paper “Contributions of Immigrant Labor to the American Economy –
A Different Take,” was written in the context of a fierce debate about the
contributions of immigrants, particularly undocumented immigrants, to
the American economy
 The paper is not a complete accounting of the costs and benefits of
immigrant labor to the American economy
 We account only for the costs associated with education to illustrate the
framework - obviously other costs are associated with raising the labor
force including food, shelter, healthcare, etc.…
 The United States is used as an example not as a special case

4. II - The Process of Material Production:
Production Process
Labor
Physical Inputs
(Equipment & Materials)
Final Product
or
Service

5. II - The Process of Production and Reproduction of Capital:
Production Process
Labor
Physical Inputs
(Equipment & Materials)
Final Product
or
Service
Initial
Outlay
($)
Initial
Outlay
($)
+ Profit
($)
Re-investment = Initial Outlay + Profit (growth)
Re-investment = Initial Outlay (stead state)

6. II - The Process of Production and Reproduction of Labor:
Production Process
Labor
Physical Inputs
(Equipment & Materials)
Final Product
or
Service
Initial
Outlay
($)
Initial
Outlay
($)
+ Profit
($)
Re-investment = Initial Outlay + Profit
Re-investment = Initial Outlay
Wage
Consumption
(Food, shelter,
education, health,
etc.…)Process of Production
and Reproduction of
Labor

7. III - The Size and Educational Characteristics of the U.S. Immigrant Labor Force (2000 – 2009):
 According to the U.S. Census Bureau, 7.9 million immigrants ages 25 and older entered the
United States during 2000 and 2009
 The educational attainment among these 7.9 million immigrants has the following distribution:
Educational Attainment (Persons 25Years Old and Older)
31% had less than high school 2.6 million
35% had a high school or some college 2.5 million
21% had a bachelor’s degree 1.7 million
13% had a graduate or a professional degree 1.1 million

8.  According to the Department of Homeland Security (DHS), 34.6% of all immigrants entering the
country during this period were unauthorized
 Utilizing this proportion, an approximately 2.7 million immigrants 25 years and older were
unauthorized immigrants
 We further assumed that unauthorized immigrants are more likely to have lower education levels
distributed in the same proportion as before:
Educational Attainment Adjusted for Unauthorized Immigrants
Less than High school (unauthorized) 1.3 million
Less than High School (authorized) 1.1 million
High School Graduate/SomeCollege (unauthorized) 1.4 million
High School Graduate/some College (authorized) 1.3 million
Bachelor’s Degree 1.7 million
Graduate/Professional Degree 1.1 million

9.  Utilizing median earnings reported by the National Center for Education Statistics
(NCES) for each educational level and data from the Pew Hispanic Center according with
unauthorized immigrants earn 72% of the median income of authorized immigrants we
calculated median earnings for both authorized and unauthorized immigrants:
Median Earnings
Less than High School (unauthorized) $18,375
Less than High School (authorized) $25,521
High School Graduate/SomeCollege (unauthorized) $26,927
High School Graduate/SomeCollege (authorized) $37,398
Bachelor’s Degree $58,531
Graduate/Professional Degree $77,411

10. IV - Calculating the Direct, Indirect and Induced Net Contribution of Labor:
Production Process
Labor
Physical Inputs
(Equipment & Materials)
Final Product
or
Service
Initial
Outlay
($)
Initial
Outlay
($)
+ Profit
($)
Re-investment = Initial Outlay + Profit
Re-investment = Initial Outlay
Wage
Consumption
(Food, shelter,
education, health,
etc.…)Process of
Reproduction of
Labor
Direct
Contribution
Indirect &
Induced
Contribution

11. Immigrant Contribution as Workers:
 Using BEA’s ratio of GDP to wages and salaries, we calculated that immigrant workers
would produce output worth 2.3 times their wages
 Based on this assumption, between 2000 and 2009 immigrant labor total contribution was
equal to $718 billion:
Immigrant Contribution to Output Output in U.S. Billion Dollars
Less than High School (unauthorized) $54.3
Less than High School (authorized) $69.2
High School Graduate/SomeCollege (unauthorized) $87.2
High School Graduate/SomeCollege (authorized) $111
Bachelor’s Degree $217
Graduate/Professional Degree $179.6
Total $718.2

12. Immigrant Contribution as Consumers:
 Utilizing BLS’ 2010 average annual consumer expenditure ($48,109) and average annual
income ($62,481), we created a ratio of expenditure to income of 0.77
 We then applied this ratio to immigrant’s average median earnings for each educational
level resulting in a consumer expenditure of $244 billion:
Immigrant Contribution as
Consumers
Median Earnings Expenditure per Person
Total Expenditure U.S. Billion
Dollars
Less than High School
(unauthorized)
$18,374.90 $14,148.30 $18.5
Less than High School
(authorized)
$25,520.70 $19,650.40 $23.5
High School Graduate/Some
College (unauthorized)
$26,926.80 $20,733.10 $29.7
High School Graduate/Some
College (authorized)
$37,398.40 $28,795.90 $37.8
Bachelor’s Degree $58,531.50 $45,068.00 $73.9
Graduate/Professional Degree $77,411.10 $59,604.80 $61
Total $244.4

13. Immigrant Contribution as Taxpayers:
 We assumed that half of unauthorized immigrants pay federal and state income tax to
calculate their contributions:
Immigrant Contribution asTaxpayers Median Earnings Tax per Person
Total Federal IncomeTax U.S.
Billion Dollars
Less than High School (unauthorized) $18,374.90 $2,338 $1.5
Less than High School (authorized) $25,520.70 $3,409 $4.1
High School Graduate/SomeCollege (unauthorized) $26,926.80 $3,620 $2.6
High School Graduate/SomeCollege (authorized) $37,398.40 $5,531 $7.3
Bachelor’s Degree $58,531.50 $10,814 $17.7
Graduate/Professional Degree $77,411.10 $15,534 $15.9
Total $49.1
 We also calculated sales tax by utilizing average sales tax rates (7.559%) adjusted for the
proportion of immigrants in each state - $12.1 billion
 Finally, we calculated property taxes by multiplying the number of immigrants who own a
house (53.96% of all immigrants are homeowners) by the average tax rate – 73.2 billion

14. Costs Related to Uncompensated Care and Second Generation Education Costs:
 The only costs incurred by society for the “maintenance” of labor are those in the form of
uncompensated care estimated at $12.6 billion
 The other cost incurred by society is the education of the second generation of immigrant
children who go back to their home. For the sake of simplicity, we assume that all the
second generation are not born and educated in the U.S. and that they all leave the
country – a very conservative assumption
 Under this assumption, the cost with education for the second generation is $41.5 billion
based on the share of students with at least one undocumented parent (6.8% of 48.4
million children enrolled in grades K-12) at an average cost per student of $12,643
 Finally, Social Security and Medicare contributions by undocumented immigrants are net
contributions representing $0.9 billion

15. V - Costs and Benefits – A Balance:
 When all elements are considered, the total annual contribution of immigrant workers to
the American economy is equal to $80 billion
In U.S. Billion Dollars
Total Contributions $80
TotalOutput $71.8
Taxes $7.3
Social Security & Medicare $0.9
Total Costs $54.3
Uncompensated Care $12.8
Education for second Generation $41.5
Net Contribution $25.7
 The indirect contributions out of immigrant expenditures of $24.4 billion were calculated
using REMI PI+ model and correspond to:
In U.S. Billion Dollars
Output $28.9
Wages and Salaries $17.2
Taxes $4.3
Social security & Medicare $0.9
Total Indirect Contribution $54.0

16. Costs and Benefits – A Balance: (continue)
 The net total direct and indirect contributions of immigrant labor represent $76.1 billion:
In U.S. Billion Dollars
Total Contributions $130.4
TotalOutput $100.7
IndirectWages and Salaries $17.2
Federal and StateTaxes $11.6
Social Security & Medicare $0.9
Total Costs $54.3
NetTotal Direct and Indirect Contribution $76.1
 Based on the same consumption expenditures (24.4 billion), using REMI PI+ model
immigrants also created 403,172 indirect and induced jobs

17. VI - Back to the Main Point of the Paper:
 What has been missing in the analyses up to this point is that immigrant labor comes from
somewhere else:
Production Process
Labor
Physical Inputs
(Equipment & Materials)
Final Product
or
Service
Initial
Outlay
($)
Initial
Outlay
($)
+ Profit
($)
Re-investment = Initial Outlay + Profit
Re-investment = Initial Outlay
Wage
Consumption
(Food, shelter,
education, health,
etc.)
Process of
Production of Labor
Labor
Wage
Consumption
(Food, shelter,
education,
health, etc..)
Process of Re-
Production of
Labor
Foreign Country

18.  The majority of immigrants in our example, arrived in the U.S. as adults, which implies
that the costs to “produce” the immigrant labor force born outside the economy of the
hosting country
 Using education as an example, we calculated the value of this transfer. We use average
costs and duration of schooling according to the National Center for Education Statistics:
Educational Levels by Degree Educational Cost (Year) Years of School Total Education Cost
Elementary and Secondary
Education
$12,643 7 $88,501
College (average public and
private)
$28,315 4 $113,260
Master’s Degree $34,600 2 $69,200
Doctoral Degree $39,700 5 $198,500
 We assumed that only 30% of the 2,743,000 immigrants with an educational level of “high
school graduate or some college’ have a “some college” and utilizing a ratio of 4.3 Master’s
degrees per PhD we can arrive at total educational costs equivalent to a “subsidy” of 1.5
trillion

19. Educational Levels
Foreign-born (arrived in or
after 2000)
Educational Costs for Each
Educational Level
Total Educational Cost In
Trillions of Dollars
Less than High School 2,503,000 $88,501 $221.5
High school Graduate and Some
College
2,743,000 $181,348 $497.4
Bachelor’s Degree 1,639,000 $277,619 $455
Graduate/Professional Degree 1,025,000 $370,067 $379.3
Total 7,910,000 $1,553
 To conclude, any discussion about costs and benefits of immigrant labor needs to take into
consideration that immigrant labor is not just labor, but labor that comes from somewhere
else
 This necessarily implies that we should account not only for their net direct and indirect
contribution, $75.2 billion, in our example, but for the massive subsidy of 1.5 trillion
embodied in the immigrant labor force and incurred by sending countries – the cost of
“producing” this labor force before they emigrate

20. ThankYou