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New Reports: DACA Has Led to Huge Strides for Dreamers, End of DACA Could Hurt Economy

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Two new reports released this week showcase Dreamers’ contributions to American institutions and the economy. These contributions face challenges now that Dreamers are slowly losing status after Donald Trump cancelled the deferred action for childhood arrivals (DACA) program last September.

National Bureau of Education: DACA helped Dreamers receive an education

The National Bureau of Economic Research (NBER) studied the impact of the DACA program and found it positively altered the education and work behavior of undocumented youth.

In their report, “Do Human Capital Decisions Respond to the Returns to Education? Evidence from DACA,” NBER  compared Dreamers who were eligible for DACA compared to those not eligible and found:

  • High school graduation rates increased 15 percent, resulting in increased college eligibility.
  • College enrollment rose 22 percent among Latina women.
  • College attendance increased by 25 percent among women.
  • Students who took on more schooling also worked more, indicating a boost in productivity, and enjoyed a higher return on their education (i.e. better wages)
  • Students passed exit exams at higher rates and demonstrated more subject mastery.

A reversal of the DACA program may overturn the improved education and opportunity gains listed above, concluded the NBER.

Dreamers are essential to U.S. economy, entrepreneurship

Highlighting the central role DACA recipients play in shaping America’s small businesses and economy, the top Democrat on the House Small Business Committee, Rep. Nydia M. Velázquez (D-NY), released an economic impact of DACA report warning that ending legal protections for Dreamers would cost the United States over $460 billion in economic output over a decade.

Wrote Velázquez:

Ending DACA will be harmful both for the economy and many young immigrants brought to the United States as children, many of whom have never known their country of origin. The American economy will lose a talented, pivotal, entrepreneurial labor source and over 800,000 young immigrants will have their educational and employment prospects destroyed. At the same time, ending DACA hurts the wages and labor standards of all American workers and has a ripple effect on a wide variety of industries on which the national economy relies.

Her Economic Impact of DACA report highlighted the following contributions of Dreamers:

  • Macroeconomic contributions
    • Deporting Dreamers could cost $60 billion and reduce economic growth by $280 billion over a decade.
    • Repealing DACA could cost the United States over $460 billion in economic output over a decade.
    • Contributions to critical public programs, like Social Security and Medicaid, could
      drop significantly.
  • Tax contributions
    • DACA participants contribute roughly $2 billion each year in state and local taxes, including personal income, property, sales and excise taxes.
    • Dreamers pay 8.9 percent on average of their income in state and local taxes, higher than paid by taxpayers in the top 1 percent.
    • DACA-mented workers contribute $1.4 billion in federal taxes, $2 billion in Social Security taxes and $470 million in Medicare each year.
  • Consumer spending power
    • About 24 percent of DACA recipients over age 25 have bought their first home.
    • In 26 states, the spending power of Dreamers with DACA is over $100 million.
  • Entrepreneurship
    • More than 5 percent of DACA recipients under age 25 have started a small business.
    • 8 percent of Dreamers over 25 years old are entrepreneurs and employing workers.
    • Many businesses will be shuttered and jobs lost if DACA is repealed.
  • Small business workforce
    • Millions of small firms around the country rely on Dreamers for a qualified, trained,
      and stable workforce.
    • Direct costs to employers of Dreamers will be over $6 billion in worker turnover costs, including hiring and training.
    • The cost to employers of rescinding DACA is equivalent to an estimated 30 major regulations – all to be borne directly by the nation’s job creators.

Business leaders, economists, and CEOs have certainly recognized Dreamers’ contributions to the economy. That’s why nearly 800 companies called on Donald Trump and the Republicans to pass a legislative solution for immigrant youth last September. Trump and the Republicans have yet to take action, however, leaving us with the increasing risk that Dreamers will be forced back into the shadows, losing all they’ve worked so hard for and left unable to contribute their talents to the U.S. economy.