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How Does CBO Estimate the Effects of Proposed Legislation Affecting Immigration?

How Does CBO Estimate the Effects of Proposed Legislation Affecting Immigration? Posted by Sam Papenfuss on March 27, 2017

‘When CBO’s Director testified at Congressional hearings at the beginning of February, he was asked some questions about how CBO analyzes potential changes to immigration policy. Because answers during Congressional hearings must be brief, this blog post provides additional information. What Factors Does CBO Consider When Estimating the Economic Effects of Proposed Legislation Affecting Immigration? In 2013, CBO published an economic analysis of the Border Security, Economic Opportunity, and Immigration Modernization Act (S. 744). That act would have revised laws governing immigration and the enforcement of those laws, allowing for a significant increase in the number of noncitizens who could lawfully enter the United States permanently or temporarily. The bill also would have created a process for many currently unauthorized residents to gain legal status, subject to their meeting conditions specified in the bill. CBO’s economic analysis was based on the agency’s cost estimate of S. 744. Both analyses, which were conducted in collaboration with the staff of the Joint Committee on Taxation, illustrate the types of effects that CBO examines when legislative proposals would have a substantial effect on the economy. Relative to current law, enacting S. 744 would have:

  • Increased the population, the size of the labor force, and employment;
  • Decreased average wages through 2024 and increased them thereafter;
  • Slightly raised the unemployment rate through 2020;
  • Boosted the amount of capital investment;
  • Raised the productivity of labor and of capital; and
  • Resulted in higher interest rates

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