Most Studies Conclude Illegal Aliens Generate More in Costs Than in Revenues

The literature on the public fiscal impact of illegal aliens reflects considerable agreement among researchers that illegal aliens are a net cost, though the magnitude of the cost is a subject of continued debate. Only 3 of the 13 studies estimated the fiscal impact of all illegal aliens in the United States on all levels of government. For these reasons, a great deal of uncertainty remains about the actual national net cost of illegal aliens. Studies’ Estimates of Net Costs Vary Considerably

Donald Huddle estimated that the national net cost of illegal aliens to federal, state, and local governments was $11.9 billion in 1992. The net cost estimates in each of the national studies are derived from three major components: (1) the direct costs of providing public benefits and services to illegal aliens, (2) displacement costs—the costs of providing various types of public assistance to U.S. citizens displaced from their jobs by illegal aliens, and (3) public revenues attributable to illegal aliens. The variation in the studies reflects an absence of clear standards for determining the items that are appropriate to include in such estimates. Why National Estimates Vary

A relatively small number of costs and revenues account for much of the variation in the estimates of the national net cost of illegal aliens. Obtaining better data on the illegal alien population and providing clearer explanations of which costs and revenues are appropriate to include would help improve the usefulness of the national estimates. Clearer explanations of which costs and revenues are appropriate to include would also help improve the usefulness of the estimates. The estimate does not include this item. 1-5.
Why GAO Did This Study

Pursuant to a congressional request, GAO examined the costs of providing benefits and services to illegal aliens, focusing on: (1) current estimates of the national net costs of illegal aliens to all levels of government; (2) the variation in these estimates; and (3) areas in which the estimates could be improved.

What GAO Found

GAO found that: (1) illegal aliens in the United States generate more in costs than revenues to federal, state, and local governments combined; (2) estimates of the national net cost of illegal aliens vary greatly, ranging from $2 billion to $19 billion; (3) a great deal of uncertainty remains about the national fiscal impact of illegal aliens, because little data exists on illegal aliens' use of public services and tax payments; (4) displacement costs and revenue estimates account for much of the variation in the estimates of the national net costs of illegal aliens; (5) the estimates are difficult to assess because the studies do not always clearly explain the criteria used to determine which costs and revenues are appropriate to include in the estimates; and (6) the cost estimates could be improved by recognizing the difficulties inherent in collecting data on a hidden population, focusing on key characteristics of illegal aliens, and explaining more clearly which costs and revenues are appropriate to include in such estimates.