How much money do undocumented immigrants contribute to the United States economy
Executive summary
Undocumented immigrants pay substantial taxes and provide major labor-market contributions: several analyses estimate they paid roughly $96–97 billion in federal, state and local taxes in 2022, and other work‑force studies place undocumented workers as large shares of agriculture, construction and service sectors (e.g., 1-in-7 field workers or 25–50% shares cited) [1] [2] [3]. Economists and policy groups also find that removing millions of undocumented workers would shrink GDP, reduce tax revenue, and worsen labor shortages — but estimates of total economic contribution, fiscal net effect, and long‑term budget impact vary across sources [4] [5] [6].
1. Tax receipts: near $100 billion a year, by multiple counts
The Institute on Taxation and Economic Policy (ITEP) and summaries based on it put undocumented immigrants’ tax payments at about $96.7 billion for 2022 — split across federal, payroll and state/local taxes — a figure echoed repeatedly in reporting and by advocacy groups [1] [7] [8]. The Center for Migration Studies similarly reports undocumented filers using ITINs paid roughly $59.4 billion in federal and $13.6 billion in state and local taxes in 2022, a smaller but still substantial subtotal that highlights methodological differences between studies [9].
2. Consumption, payroll and payroll‑tax contributions
Beyond income taxes, undocumented workers contribute to payroll taxes and sales/property taxes through employment and consumption. One summary counts $19.5 billion in federal income taxes and $32.3 billion in federal payroll taxes in its 2022 estimate, with about $37.3 billion at the state and local level — numbers that underscore that undocumented households contribute across multiple tax bases even while often being ineligible for many public benefits [7] [1].
3. Labor-market impact: concentrated and essential
Undocumented workers are concentrated in particular industries — agriculture, construction, maintenance, hospitality and certain health settings — where they make up meaningful fractions of the workforce (for example: large shares of field and crop workers and notable shares in construction and hospital staffing) [2] [3] [6]. Policy analyses warn that mass deportation or sharp reductions in undocumented labor would produce significant job shortages, reduce output and slow GDP growth [4] [5].
4. Macro effects and cost–benefit framing
Multiple analysts find immigration overall tends to support growth and in many cases reduces budget deficits in the short term because most immigrants are working‑age net taxpayers; the Economic Policy Institute and Econofact summarize that immigrants (including undocumented) often bring a short‑term budget dividend and help sustain the worker‑to‑retiree ratio [6] [5]. Conversely, some studies cited in policy debates model that large‑scale deportations would cut annual growth substantially — estimates vary by model and scenario [4].
5. Where estimates diverge and why: methods matter
Differences in headline numbers stem from methodology: who counts as “undocumented” (estimates range around ~8–11 million in various sources), which taxes are included (federal vs. payroll vs. state/local vs. consumption/property), whether ripple effects (economic activity supported by spending) are counted, and whether one nets public-service costs against revenues [2] [6] [1]. Some studies focus narrowly on tax remittances; others attempt broader macroeconomic modeling, producing different conclusions about net fiscal impact [9] [1] [5].
6. Political context and incentives shaping the numbers
Advocacy groups and think tanks with differing missions use the same underlying data to support opposing policy arguments: groups focused on immigrant integration emphasize tax payments, job creation and the cost of deportation [1] [2], while other analyses used in policy debates stress potential fiscal pressures or labor‑market displacement — though the sources here indicate a “broad consensus” that immigration is not a large fiscal drain and may reduce long‑run deficits [6] [5]. Readers should note these institutional perspectives when weighing headline figures [1] [6].
7. What reporting does not establish (limits of available sources)
Available sources do not mention a single agreed‑upon total dollar estimate of the full GDP contribution of undocumented immigrants that all economists accept; they also do not settle the precise long‑term net fiscal impact across all government levels under every policy scenario [4] [6]. Nor do the materials provided fully reconcile divergent tax‑counting methods or produce a unanimous estimate of the undocumented population size used in every study [1] [9].
8. Bottom line for policymakers and the public
Undocumented immigrants clearly make material tax payments (roughly $96–97 billion in at least one comprehensive 2022 estimate) and fill essential jobs that support output and tax revenues; removing them at scale would shrink economic activity and tax receipts in many models [1] [4] [5]. Exact magnitudes vary by study and assumptions; evaluating policy requires attention to methodological choices and the vested interests of citing organizations [6] [1].
If you want, I can assemble a side‑by‑side table showing how the major studies compute tax totals and which taxes, population counts and ripple effects each includes, using only the sources above.