An analysis of U.S. immigration and policy reforms

In this dissertation, possible reforms to the U.S. immigration policy are examined, particularly targeting undocumented migration. The global trade and migration model (GMig2) is modified to include a third labor category—undocumented unskilled—to reflect estimates of undocumented workers residing in the United States. The model is then used to analyze the impacts of deportation and legalization scenarios on the U.S. economy. We find that the deportation of undocumented workers causes a considerable loss to the U.S. economy in terms of real GDP. The legalization of Mexican undocumented immigrants, on the other hand, is found to increase U.S. real GDP. In addition, a spatial econometric model of migration that explicitly considers spatial dependence among neighboring countries is used to examine the importance of their location relative to the role of traditional determinants of migration such as population and income in the country of origin, distance between the origin and destination countries, among others. In addition, the predictive performance of the estimates resulting from the spatial econometric model are evaluated against estimates obtained using two non-spatial econometric models based on the root mean square error criterion. The resulting estimates were used to predict the levels of migration into the United States and used in the development of the base case scenario in a dynamic general equilibrium model of migration. The long-run effects of U.S. immigration policy proposals are analyzed using a dynamic general equilibrium model of migration that includes the undocumented labor force. We target all undocumented workers regardless of their country of origin. Combinations of the following policy scenarios are considered: increased border control, one-time legalization (amnesty), and increased quota of foreign unskilled workers. The results indicate that increasing border control is detrimental to the U.S. economy, which is consistent with the literature. Under the model assumptions, adding both the increased in quota for unskilled migrants and amnesty to the increased border control provided most benefits with an increase in the growth of the U.S. GDP, investment, and capital stocks