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hi I'm Kent Smithers a professor here at
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the Wharton School and now I'm going to
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give you a quick overview of the new
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immigration reform policy simulator it's
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available to Penn Wharton budget model
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group notice that you have several
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different graphs that you can look at
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things like total population size and
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number of jobs the old-age dependency
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ratio that's very useful for things like
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understanding how many young people that
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we have / older retiree and then of
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course gross domestic product GDP that
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people often care about so now let's
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consider different policy combinations
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each one a dial control here has five
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selections and we have three policies
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altogether so that's a hundred twenty
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five different policy combinations that
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you can get and see yourself for each
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policy combination you know the actual
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simulation model takes several hours to
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run in the case of immigration but we
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use advances in cloud computing to give
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you instant feedback on the results
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because we pre computed everything for
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you all right let's go through the
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different policies let's think about
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increasing the net amount of legal
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immigration right now from this tool tip
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you can see that net legal immigration
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to the United States currently amounts
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about 800,000 people per year and some
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of the policy ideas out there is to
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maybe increase that maybe twenty five
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percent a year and not so surprisingly
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population goes up total number jobs are
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going to go up and GDP is also improved
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because of more workers in the economy
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and the old-age dependency ratio is
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slightly improved as well in particular
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we're going to have a fewer older people
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per worker because immigrants are coming
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in typically during working age and we
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are able track that fairly precisely
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using census level data alright let's
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talk about some other potential changes
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here and the first one is or the second
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one sorry is changing now the
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composition of the net legal immigration
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right now as you can
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even those tooltip about thirty five
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percent of the US adult legal immigrants
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have a bachelor's or advanced degree so
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the idea here is that we can now
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increase that percentage without
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actually in painting they eat hundred
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thousand a number of legal immigration
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immigrants per year and so we can look
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at a couple things like you know what
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happens to GDP here if suppose we go
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from thirty five percent to fifty five
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percent and now that's a slight positive
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it's not huge and it's true that this
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the values here are in trillions of
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dollars but you can move your mouse over
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and see the actual numbers or if you
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want to you can always zoom in in a
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particular set of years and get even
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more precision there if you if you'd
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like and in particular the blue line is
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the current policy the red line is the
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effects of the new policy and the reason
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why it's it's not a big impact is that
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legal immigration flow at eight hundred
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thousand per year is not that large of a
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fraction of the US population workforce
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and so going from thirty five percent to
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fifty five percent of being
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college-educated it's only going to add
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around 160,000 college graduates per
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year and that's only about one half of
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one percent of all college educated
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worker workers in the economy and so it
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doesn't have a tremendously large impact
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all right now let's look at a couple
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other policies and the one is to
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potentially increase deportation of a
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unauthorized immigrants so now we're
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really shifting from legal status to
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unauthorized immigrants and the other
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one is to offer legal status just the
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opposite to unauthorized immigrants we
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can see from the tool tip that there's
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about 11.3 million unauthorized
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immigrants in the United States and so
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if you choose to go say this direction
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of legalization is the same we're going
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to be legalized in a roughly around ten
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percent per year so within a decade will
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have legalized everyone and so let's
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look at the impact on jobs and this may
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be
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a surprising to a lot of people as we
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legalize and notice jobs actually
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slightly go down it's a huge change but
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it does it's actually legalization
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actually leads to fewer I jobs again not
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a big change but it is technically
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negative and the intuition there is that
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if you're currently unauthorized you
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pretty much have to work and in order to
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survive and so unauthorized workers
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actually have a higher labor force
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attachment rate or participation rate
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than those that are authorized
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authorized workers are able to now go to
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school and therefore not be in the
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workforce for a period they're able to
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look for a better job a more appropriate
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job because they can qualify for
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unemployment insurance things like that
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and so that tends to reduce jobs to the
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impact on GDP is basically a wash
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there's no particular theoretical reason
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this would be the case but in terms of
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the art rather detailed calculations
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it's basically a wash and it has almost
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no impact on GDP and the intuition there
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is that even though the number of jobs
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has gone down a little bit the once you
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are converted to legal status again
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you're able to go to school you're able
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to get more productivity and so as a
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result of that the impact on GDP is next
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to nothing now let's think about what
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happens when we go the opposite
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direction where we start deporting it's
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a ten percent per year within a decade
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everybody would be all the unauthorized
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illegal immigrants would be deported now
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notice the impact unemployment is now
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much more negative and the the reason
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behind that is that we're losing people
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it's like a hundred percent detachment
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now for the workforce for unauthorized
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immigrants in the the native-born
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participation rate in the labor market
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cannot possibly rise enough to meet that
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that gap that or that reduction the
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number of jobs and GDP also goes down
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are pretty substantially you can see by
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within by 2035 close to the trillion
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dollars reduction in GDP and so you know
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both these
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policies have been kind of advocated on
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both sides of saying that they're going
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to increase the number of jobs or
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increase GDP in fact neither policy I
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works in the way that it's often then
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presented and so you can try many other
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combinations yourself again you have
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about 125 different combinations to
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choose from and again many combinations
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I've explored myself so try they try it
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yourself and it make up your own mind
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thank you
