1 Unauthorized Immigrants: Implications for the U.S. Population, Economy, and Social Security Steve Goss, Office of the Chief Actuary Social Security Administration August 6, 2015 SSA Retirement Research Consortium

2 Net Immigration (legal and unauthorized) has augmented the birth rate

3 Foreign Born Residents: 1)Naturalized Citizens 2)Legal Permanent Residents (LPR) 3)Other-than-LPR (OTL) (14.0 million in 2014) a)Temp Visas (non-immigrants) (1.7 million) b)Temp Visa Overstayers (1.2 mill in 2014) c)Never legally authorized (11.1 million) 4)“Unauthorized”--3b+3c (12.3 million) 3

4 Unauthorized contribute to the Economy---and to Social Security  Unauthorized can only be estimated  Highly uncertain imputations and residuals  We assume roughly same LFPR by age, sex, child presence  Higher births increase male LFPR, lower female  Estimates for  12.6 million OTL, 8.3 million employed  10.8 million unauthorized, 7.0 million employed 0.6 million employed visa overstayers 0.7 million employed with fraudulently obtained ID 1.8 million employed, reported to suspense file 3.9 million employed in underground economy  Estimate 3.1 million unauthorized paid $13 billion to OASDI in 2010  Estimate 0.2 million received $1 billion in OASDI benefits in 2010 based on unauthorized work

5 Employment of Unauthorized  We assume average taxable earnings at about 80 percent of that for all workers  Assume higher if become authorized  Employment rate elasticity to econ conditions? Lower due to fewer income substitutes Less likely to have UI coverage Not eligible for SSI or OASDI So more need to accept inferior employment  However, there is another elasticity------

6 Size of Unauthorized population is elastic—making employment rate appear less elastic

7 Large Net Inflow Post-IRCA Ceased with Recent Recession

8 Emigration of Unauthorized will continue to rise Post-IRCA

9 As the Unauthorized Population “Matures” Post- IRCA Emigration will Increase

10 Age Distribution Extends Post-IRCA; As Young New Arrivals Age

11 Our Estimates for Proposals  Comprehensive Reform  S.744 (Rubio) Passed by the Senate in 2013   President’s Executive Actions  2012 DACA—children under 30  2014 Actions Enforcement Expand DACA Held up by Court since May 2015 Add DAPA (Parents) Held up by Court since May 2015 Entrepreneurs Et cetera

12 Comprehensive S.744 (June 2013)  Broad legalization of unauthorized—like IRCA  Expansions of legal limits on immigration  Projected increases in:  Population; 1.9% in 2024, 3.5% in 2050  Employment; 2.1% in 2024, 3.5% in 2050  GDP; 2.1% in 2024, 3.5% in 2050  Taxpayers; 3.8% in 2024, 5.3% in 2050  OASDI Tax; 3.3% in 2024, 4.8% in 2050  OASDI Cost; 0.1% in 2024, 3.2% in 2050  Would reduce 75-year OASDI actuarial deficit by 0.21% of taxable payroll

13 Executive Actions (2012, 2014)  Legalization of some unauthorized—not to citizenship  Minor expansion of legal limits---entrepreneurs  Small Projected increases in:  Population; 0.1% in 2024, 0.2% in 2050  Employment; 0.2% in 2024, 0.2% in 2050  GDP; 0.2% in 2024, 0.2% in 2050  Taxpayers; 0.5% in 2024, 0.5% in 2050  OASDI Tax; 0.4% in 2024, 0.4% in 2050  OASDI Cost; 0.0% in 2024, 0.5% in 2050  Would reduce 75-year OASDI actuarial deficit by 0.01% of taxable payroll

14 For Further Information  2015 OASDI Trustees Report  Actuarial Note, Number  Actuarial Note, Number  Demographic Assumptions  Model Documentation 14