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The Economics and Policy of Illegal Immigration in the United States

The 20th century saw rapid technological change that enhanced productivity, created new industries, and increased demand for skilled labor. 1 The core of our economy shifted first from agriculture to manufacturing and then from manufacturing to services. 2 In recent decades, increasing specialization and trade have blurred the lines between the domestic and global economies. In many industries, globalization has increased competition for jobs as workers around the world participate in the constant flow of goods, services and information. But it has also created opportunities for highly skilled workers, who now enjoy a broader markets for their output. Throughout. | Ezzzpi MIGRATION POLICY I INSTITUTE The Economics and Policy of Illegal Immigration in the United States Gordon H. Hanson University of California-San Diego and National Bureau of Economic Research December 2009 Acknowledgments The author thanks Madeleine Sumption for valuable comments and advice on earlier drafts of the manuscript. This paper was written for the Migration Policy Institute s Labor Markets Initiative to inform its work on the economics of immigration. The paper does not necessarily represent the views or policy recommendations of MPI or its Labor Markets Advisory Group. MPI is grateful for the generous support of its funders and with respect to its Labor Markets Initiative particularly wishes to acknowledge the Open Society Institute J.M. Kaplan Fund and the Ford Foundation. For information on the Labor Markets Initiative please visit www.migrationpolicy.org lmi. 2009 Migration Policy Institute. All Rights Reserved. No part of this publication may be reproduced or transmitted in any form by any means electronic or mechanical including photocopy or any information storage and retrieval system without permission from the Migration Policy Institute. A full-text PDF of this document is available for free download from www.migrationpolicy.org. Permission for reproducing excerpts from this report should be directed to Permissions Department Migration Policy Institute 1400 16th Street NW Suite 300 Washington DC 20036 or by contacting communications@migrationpolicy.org. Suggested citation Hanson Gordon H. 2009. The Economics and Policy of Illegal Immigration in the United States. Washington DC Migration Policy Institute. Table of Contents Executive Summary.I I. Introduction.3 II. The Economics and Policy of Illegal Immigration.4 1. Unauthorized Immigrants Are a Large Part of the Low-Skilled US Labor Force.5 2. Illegal Immigration Responds to Market Conditions in Ways that Legal Immigration Presently Cannot.7 3. The Overall Impact of Illegal Immigration on .