NC Budget and Tax Center

Economic potential of executive action on immigration

The American Immigration Council released last week a summary of the emerging research on the positive economic potential of the Executive Action on Immigration. These national findings for stronger economic growth, increased tax revenue and higher average wages for all workers suggest state-level benefits, particularly in North Carolina, will be positive– albeit modest– as well.

Here are some additional reasons why North Carolina is poised to particularly benefit economically from immigration action that provides temporary status to parents of children born in the United States and expansion of the Deferred Action for Childhood Arrivals (DACA) program providing work authorization for children raised in the United States.

  1. One of the major drivers of estimated improvements to GDP growth resulting from the immigration action is growth in the labor force. The benefits of an increased labor force to North Carolina would be significant given that the state’s labor force has actually declined over the past year despite the population growing. Data on the labor force participation rate of the total foreign-born population (not just those without documents) showed participation rates were nearly 10 percentage points higher than for the U.S. born population.
  1. North Carolina had a high application rate for immediately eligible youth under the previous Deferred Action for Childhood Arrivals. 60 percent of those immediately eligible applied in NC. If this expanded program generates similarly high application rates, the result will be a greater number of residents in North Carolina benefiting from work authorization and the economy benefiting as well. One factor that continues to limit the economic benefits in North Carolina of DACA is the fact that these students, despite being educated in NC public schools, are not eligible for in-state tuition at post-secondary institutions. This runs counter to practices in 17 other states where laws permit certain students without documents who have attended and graduated from secondary schools to pay the same tuition as their classmates at public post-secondary institutions thus increasing their earning potential.
  1. Revenues are down in North Carolina as a result of the tax plan put in place in 2013. Executive action on immigration won’t solve the problem of a tax code that is inadequate but it would increase tax compliance and earnings that are subject to income taxes. The Center for American Progress estimates that if those benefiting from the executive action on immigration were able to receive temporary work permits, an additional $197 million in revenue would be collected over five years.

North Carolina stands to benefit from the Executive Action on immigration and should ensure that those eligible are able to apply so that the full economic potential of this federal policy can be realized.

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