The High Cost of Cheap Labor
Illegal Immigration and the Federal Budget

August 2004

By Steven A. Camarota

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Table of Contents

Executive Summary

A Complex Fiscal Picture
Policy Implications
Summary Methodology

Why Study the Fiscal Impact of Illegals?

Data Source and General Principles
Estimated Tax Payments
Assigning Costs by Household
Adjustment for Under-Reporting in the CPS


Demographic Overview
Estimated Tax Payments
Costs by Household
Balance of Tax and Cost
The Fiscal Implications of Amnesty
Comparisons to Other Studies



About the Author
Steven A. Camarota is Director of Research at the Center for Immigration Studies in Washington, D.C. He holds a master's degree in political science from the University of Pennsylvania and a Ph.D. in public policy analysis from the University of Virginia. Dr. Camarota often testifies before Congress and has published widely on the political and economic effects of immigration on the United States. His articles on the impact of immigration have appeared in both academic publications and the popular press including Social Science Quarterly, The Washington Post, The Chicago Tribune, Campaigns and Elections, and The Public Interest. His most recent work published by the Center for Immigration Studies includes: Immigration in a Time of Recession: An Examination of Trends Since 2000; Where Immigrants Live: An Examination of State Residency of the Foreign-Born; Back Where We Started: An Examination of Trends in Immigrant Welfare Use Since Welfare Reform; and The Open Door: How Militant Islamic Terrorists Entered and Remained in the United States, 1993-2001.