How does the cost of undocumented immigration compare to the cost of legal immigration processes in the US?
Executive summary
Estimates of the fiscal cost of undocumented immigration vary widely depending on methodology and political orientation: advocacy and Republican congressional reports cite figures around $150 billion per year for “illegal” immigration (FAIR, House Budget Committee summaries) [1] [2], while academic and nonpartisan analyses describe a more mixed picture in which undocumented immigrants both impose public-service costs and contribute taxes and economic activity (Cronkite/AZPM, Penn Wharton) [3] [4]. Several think‑tank pieces contrast the fiscal outcomes of legal versus unlawful migrants, claiming that an average new legal immigrant is a net fiscal gain while the average unlawful immigrant is a net fiscal cost — the Manhattan Institute puts those figures at +$350,000 and −$80,000 respectively over long horizons [5].
1. Divergent headline numbers — politics and methodology drive the gap
Public discussions often start with big headline totals: FAIR and allied Republican committee reports compile state and local expenditures and reach roughly $150 billion per year for illegal immigration [2] [1]. Those tallies typically add up expenditures on schools, health care, shelters and law enforcement and present them as taxpayer burdens; critics and other outlets note that such studies include different populations, time frames, and services in their sums, producing high variance in results [6] [2].
2. Academic and nonpartisan studies show costs and offsets
More academic or mixed reviews emphasize complexity: undocumented immigrants generate some public costs (education, emergency health care, local services) but also pay taxes and boost labor supply and consumption. Cronkite/Arizona PBS reports that the fiscal picture “is more complex than many people realize,” citing both costs and economic offsets and noting around 11 million undocumented immigrants as a working figure [3]. The Penn Wharton model highlights that aggressive enforcement actions like mass deportation themselves carry large fiscal and macroeconomic costs — e.g., modeling suggests permanent mass deportation could add roughly $900 billion over a decade in net cost under some scenarios [4].
3. Who counts as “legal immigrant” and why that matters
Comparisons hinge on which legal categories you include. The Manhattan Institute’s 2025 update separates entrants by admission class and education and reports that the “average new legal immigrant will pay $350,000 more in taxes than he/she receives in government benefits” over extended windows — a claim that depends on which visa classes and long‑term earnings profiles are modeled [5]. Recent policy changes also affect legal immigrants’ net costs: reporting indicates new federal law changes in 2025 removed ACA subsidies for many lawfully present immigrants, which analysts warn will change near‑term fiscal and market dynamics for legal migrants [7].
4. Age, education and employment are key drivers of fiscal impact
Multiple sources stress that education, age and labor‑market attachment — not merely legal status — drive fiscal outcomes. The Manhattan Institute finds highly skilled, legally admitted immigrants yield large net fiscal gains, while low‑educated immigrants (legal or not) can have net costs over relevant windows [5]. National Affairs commentary similarly notes that low incomes make many immigrants eligible for means‑tested benefits, creating fiscal pressures irrespective of legality [8].
5. Localized fiscal pressures vs. national net effects
City and state officials sometimes report steep local expenditures tied to recent arrivals — for example, New York City officials estimated multi‑billion-dollar shelter and service costs tied to migrant arrivals in recent years [9]. Those localized budgets contrast with national academic assessments that count tax payments and long‑run gains; thus a policy that shifts costs between levels of government can make the local burden appear larger even if national net effects are smaller or more nuanced [9] [3].
6. Enforcement costs and economic ripple effects change the ledger
Analyses of large‑scale enforcement (deportation, work‑permit revocations) show those policies themselves are costly and have broader economic consequences: the Penn Wharton modeling projects major GDP and fiscal losses under sustained mass‑deportation scenarios [4]. Conversely, restricting legal immigration or cutting benefits to lawfully present immigrants can have downstream effects on labor markets and prices, which proponents and critics both point to in framing costs [10] [7].
7. What’s missing or disputed in current reporting
Available sources do not present a single, agreed-upon, apples‑to‑apples comparison of the full lifetime fiscal cost of an undocumented immigrant versus one who entered legally using the same age/education/occupation profile; instead, reported figures depend heavily on chosen cohorts, time horizons, and included programs [5] [3]. Competing groups use different assumptions: FAIR and similar studies emphasize immediate public outlays [2], while academic models emphasize lifetime tax flows and macro effects [5] [4].
Conclusion — accountable comparisons require consistent assumptions
To make a rigorous comparison you must fix the population (age, education, family status), the time horizon (annual vs. lifetime), and which costs and revenues are counted (local services only vs. federal transfers and taxes). Current reporting offers numbers that support different policy narratives: roughly $150 billion annual burden estimates from advocacy and committee reports [2] and nuanced academic models that show legal immigration often produces net fiscal gains while undocumented immigration tends to show net costs under certain assumptions [5] — but both sides’ conclusions depend on the assumptions they build into their models [1] [4] [3].