1 Unauthorized Immigrants: Implications for the U.S. Population, Economy, and Social Security

Steve Goss, Office of the Chief ActuarySocial Security Administration

August 6, 2015SSA Retirement Research Consortium

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Net Immigration (legal and

unauthorized) has augmented the birth

rate

19401941194219431944194519461947194819491950195119521953195419551956195719581959196019611962196319641965196619671968196919701971197219731974197519761977197819791980198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022202320242025202620272028202920302031203220332034203520362037203820392040204120422043204420452046204720482049205020512052205320542055205620572058205920602061206220632064206520662067206820692070207120722073207420752076207720782079208020812082208320842085208620872088208920900

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Historical and Projected Total Fertility Rate and Augmented Total Fertility Rate to Include Net Immigration: U.S.

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Foreign Born Residents:

1)Naturalized Citizens2)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)

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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 2010---http://www.ssa.gov/OACT/NOTES/pdf_notes/note151.pdf 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

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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------

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Size of Unauthorized population is elastic—

making employment rate appear less elastic Recent Unauthorized Population at End of Year in millions

versus Total Population Unemployment/Underemployment Rates

0

2

4

6

8

10

12

14

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

UnauthorizedPop

UnempRate

UnderemployRate

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Large Net Inflow Post-IRCA Ceased with Recent Recession

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Emigration of Unauthorized will continue to rise Post-IRCA

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

Projected Unauthorized Population at End of Year in millions

0

5

10

15

20

25

2001

2011

2021

2031

2041

2051

2061

2071

2081

UnauthorizedPop

UnempRate

UnderemployRate

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

Distribution of "Unauthorized" Population by Age

0

100,000

200,000

300,000

400,000

500,000

0 10 20 30 40 50 60 70 80 90 100

2010

2050

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Our Estimates for Proposals

Comprehensive Reform S.744 (Rubio) Passed by the Senate in 2013 http://www.ssa.gov/OACT/solvency/MRubio_20130628.pdf

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 http://www.ssa.gov/OACT/solvency/

BObama_20150202.pdf

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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

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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

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For Further Information

2015 OASDI Trustees Reporthttp://www.socialsecurity.gov/OACT/TR/2015/tr2015.pdf

Actuarial Note, Number 148http://www.socialsecurity.gov/OACT/NOTES/pdf_notes/note148.pdf

Actuarial Note, Number 151http://www.socialsecurity.gov/OACT/NOTES/pdf_notes/note151.pdf

Demographic Assumptionshttp://www.socialsecurity.gov/OACT/TR/2015/2015_Long-Range_Demographic_Assumptions.pdf

Model Documentationhttp://www.socialsecurity.gov/OACT/TR/2015/2015_LR_Model_Documentation.pdf

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