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