08/04/2013 08:27 pm ET Updated Oct 04, 2013

Why Citizenship Matters: Getting to the Bottom Line


This past Tuesday, I had the opportunity to participate in a half-day workshop on immigration reform sponsored by the AFL-CIO and the Economic Policy Institute. Held at the AFL-CIO's headquarters in Washington, DC, the focus of the session was on why a roadmap to citizenship for America's undocumented residents is an essential component of reform, a topic that is increasingly relevant as certain House Republicans argue for creating a legalization process that would exclude citizenship as the ultimate endpoint.

Speaking at the event were Senator John McCain and Congressman Xavier Becerra (they were clearly the main draws), as well as a selection of economists, activists, and business leaders. I was expecting a wonkish discussion about policy -- and, as one of the two economists sharing our views, that was certainly my anticipated contribution.

Instead, it was an extremely moving event, particularly when Senator McCain's eyes teared as he recounted a re-enlistment ceremony for U.S. soldiers he attended in Iraq, one where some immigrant soldiers who were slated to receive citizenship that day were represented only by their empty boots, having just lost their lives defending a country they were still hoping to fully join.

But it didn't stop there. Jose Antonio Vargas, the Pulitzer Prize winning journalist who came out as being undocumented in 2011, and Gaby Pacheco, who has been one of the long time leaders of the DREAM movement, shared the pain of being not fully accepted in the only country they have ever known - and yet still reminded all of us to speak with love and respect to those with whom we disagree.

So I came away touched but also much clearer that there are essentially three reasons why a pathway to citizenship matters: a financial bottom line, a civic bottom line and a bottom line about the negotiations themselves.

The first bottom line is what I was there to talk about. Douglas Holtz-Eakin, who served as Chief Economist for the Council of Economic Advisors under the Bush administration, spoke before me; he was very supportive of immigration reform and its positive economic impacts but suggested that citizenship itself isn't that important economically while legalization is.

Turns out that that's not quite what the newest research tells us. Legalization is indeed important -- and a Department of Labor study conducted after the 1986 Immigration Reform and Control Act (IRCA) showed that gaining legal status contributed to a 15 percent gain in immigrant income over about five years. But in work that we did last year at the Center for the Study of Immigrant Integration, we found that there was a gain of about 8 to 11 percent for citizens above non-citizen immigrants, even accounting for all other factors that might account for the difference in income.

Of course, the raw (or unadjusted) difference in earnings between citizen and non-citizen immigrants is much larger, on the order of about forty percent. But about half of that is explained by what economists call human capital characteristics; education, English ability, and other such factors. Of the remainder, about half is explained by recency of migration and local labor market conditions. But the rest is that 8 to 11 percent: a sort of "citizenship premium" which seems to result from increased job mobility (citizens can apply to a wider range of jobs) as well as the signal citizenship sends to employers about one's permanence and commitment.

If you're a methodological nerd (my kind of people!), you might be worried about two things: (1) didn't we really just find a legalization difference (since only legal residents can become citizens), and (2) isn't the result because it's a different sort of person who becomes a citizen (in which case the so-called "citizen gain" is really just a result of those less observable personal characteristics, such as determination or grit)?

In fact, in California, where we were able to separate out -- through an estimating procedure -- those who were documented from those who are undocumented, we found that there was a very modest gain for those who were documented and that most of the income increase (on the order in California of 14 percent) came from becoming a citizen.

As for the personal characteristics argument, we tried to take a look at what that gain looks like over time, by taking information about the year someone naturalized and simulating the income path over time. Turns out the results are directly parallel to the few longitudinal studies that have actually followed individuals over multiple years - an approach that completely controls for personal characteristics since they are, after all, the exact same people.

This is part of the reason why economists at the Center for American Progress, using slightly different methods, estimate that legalization with a path to citizenship could bring a 25 percent boost in income, with about three-fifths from legalization and the rest from citizenship. The resulting gains in GDP over ten years: between $800 billion and $1.4 trillion, depending on the rapidity of the path to citizenship.

That is a big economic boost -- but there are two other non-financial bottom lines which are also absolutely critical.

The first has to do with the sense of ourselves as Americans. The idea of creating a path to legalization without citizenship -- perhaps because you don't want to face the wrath of those voters later on -- goes contrary to American values. Think about consciously creating a group of second class citizens, folks who grew up in this country, who live here, who are raising their children here, who have permanent stakes here -- but have no ability to fully express their voice in civic life. And ask yourself: is that who we want to be?

Apparently, the answer given by most Americans is a resounding "No." When asked in a recent CBS News poll if they favored a path to citizenship for undocumented immigrants (assuming a waiting period, fines, background checks, and learning English -- all features of the Senate's proposed reform), 78 percent responded positively -- including 70 percent of Republicans. By playing with the notion of denying citizenship, House Republicans are alienating not just future but current voters.

There's a third key bottom line: The integrity of the immigration reform negotiations themselves.

Immigrant rights activists have given a lot in these negotiations. They've accepted a higher level of militarization of the border and internal enforcement than anybody believes is necessary, reasonable, or called for. They have accepted that legalization rules and fees are likely to leave a large share of the 11 million still living in the shadows. They've accepted that the Senate bill rewrote past practice such that immigrants who have paid into the Social Security system will no longer be able to match those past contributions to any new Social Security number they might obtain.

But when you look at the integrity, composure and determination of Jose Antonio Vargas and Gaby Pacheco, you also realize a very simple fact: the denial of a path to citizenship is an insult to these people. It's a denial of their struggles, of their aspirations, and of their desires to be American. And they, and their friends, relatives, and allies, will accept nothing less than a full path (no matter how challenging) to citizenship.

We should join them in insisting that citizenship remain part of the package. It's good for the economy, important for civic life, and a key bottom line for those who have fought so hard to bring us to this point.

This piece is also posted on the Economic Policy Institute Blog.