In this post, we’re answering a question we received from Jen: What is the economic impact of refugees in the near and long term (transition time between needing assistance and adding to the economy)?
Since the beginning of his presidency, Donald J. Trump and top advisers have portrayed refugees and asylum seekers as a risky, undesirable demographic.
In 2016, Vice President Mike Pence tried to ban the resettlement of Syrian refugees while he was Indiana’s governor. A federal appeals court blocked the attempt, finding that Pence lacked evidence supporting claims that Syrian refugees were a threat to the people of Indiana. Trump, for his part, issued an order in March 2017 with language suggesting that refugees are a fiscal burden.
The order demanded that U.S. officials produce a report “detailing the estimated long-term costs of the United States Refugee Admissions Program at the Federal, State, and local levels, along with recommendations about how to curtail those costs.”
The draft report didn’t support that assumption of burden, though.
In fact, researchers found that during the 10 years between 2005 and 2014, refugees and asylees here from 1980 on contributed $63 billion more to government revenues than they used in public services. Senior administration officials, possibly including White House aide Stephen Miller, quashed the 55-page draft and submitted a three-page report instead, The New York Times reported. Soon after, the White House released a fact sheet selectively borrowing from the draft report by noting that the U.S. “spent more than $96 billion on programs supporting or benefitting refugees between 2005 and 2014.”
There were no references to the $63 billion more in taxes that refugees put into public coffers than the value of the services they used.
This pattern of cherry picking one side of the ledger isn’t unusual for those seeking to bolster a political argument. Trump used similar cherry-picked numbers to link immigration, in general, with American wage decline and fiscal strain during his 2016 campaign, as the Center for Public Integrity reported previously.
Before diving deeper into fiscal research on refugees, though — including what the quashed draft report found in detail — it helps to understand how refugees and asylum seekers differ. Some fiscal studies, including the study Trump ordered, scrutinize both groups. It’s also helpful to understand the size of these groups compared to the U.S. population.
How does someone gain refugee or asylee status?
Refugees are fleeing persecution or war and are admitted from abroad. To vet them, U.S. officials are dispatched to interview candidates as part of a lengthy screening process. United Nations or U.S. embassy officials refer candidates to the U.S. State Department. Refugees often seek temporary shelter in neighboring countries to escape violence and threats. Many Syrian war refugees, for example, have fled to Turkey, Lebanon and Jordan. After intensive screening, approved refugees enter the U.S. with the help of resettlement organizations and must sign promissory notes to repay the U.S. government for travel costs. About 75 percent of loans are repaid within 15 years and 64 percent within five years, according to the U.S. State Department.
Asylum seekers claiming to be fleeing violence or persecution, by contrast, can present themselves at a U.S. port of entry and request to apply for asylum, as outlined in international treaties the U.S. has signed, as well as U.S. law. The law also allows foreigners to apply for asylum after they’re already inside the United States, whether they entered originally on visas or entered illegally, with some restrictions. Immigration judges review cases to determine whether the asylum applicant’s fear meets the criteria for granting refuge. Asylum seekers have a right to retain an attorney at their expense — or seek pro bono help — but they don’t have a right to an appointed attorney in proceedings.
In 2018, even as refugee numbers surged globally, the Trump administration capped refugee admissions at 45,000. Only 22,000 were ultimately admitted, mostly from the Democratic Republic of the Congo, Burma and Ukraine. Trump used his executive power to cap refugee admissions this year to a new low, for annual caps, of no more than 30,000. In 2016, under President Barack Obama, the U.S. admitted 85,000 refugees.
Trump has also sought to deter mostly Central American migrants who are arriving often with children at the southern border and asking for asylum.
“The United States will not be a migrant camp and it will not be a refugee holding facility … not on my watch,” Trump said last year. In April of this year, after tweeting that the “country is full,” Trump unveiled an unprecedented proposal to require that asylum seekers pay an application fee. Trump argues that changes to the asylum system are needed because he believes that the vast majority of migrants are faking or exaggerating their fears — despite U.S. State Department recognition that murder rates, gang rapes and extortion are rampant in Central America, especially the main source countries of Honduras, Guatemala and El Salvador.
Refugees and asylees are a tiny fraction of the U.S. population, so it’s hard to credibly pin major national fiscal impact on either group.
Between 2009 and April 2019, a total of 648,482 refugees were admitted to the U.S., according to U.S. Department of State refugee data. That admissions total is equivalent to about 0.2 percent of the U.S. population of 328 million. Separately, between 2007 and 2017, a total of 263,215 people were granted asylum, according to the 2017 Yearbook of Immigration Statistics. That cumulative number is equivalent to about 0.08 percent of the U.S. population.
But isn’t there a backlog of asylum requests, potentially adding more people?
Yes. As of January 2019, 325,277 asylum request cases were pending. But even if all those cases were approved (they won’t be), that number would be equivalent to 0.1 percent of the U.S. population of 328 million. Further, if you were to multiply all those asylum cases by 10 — to account for an exaggerated number of family members who could benefit — that number would add up to the equivalent of 1 percent of the U.S. population.
But can’t refugees or asylees have a noticeable fiscal impact on communities, especially if the newcomers settle in groups, as immigrants often do? Yes. Let’s see what reputable studies show.
Refugees come with nothing
Randy Capps is the director of research at the Migration Policy Institute, or MPI, a nonpartisan think tank based in Washington, D.C., that’s studied how refugees with a range of language skills and education integrate over time.
“Refugees come to the U.S. with nothing,” Capps said, but they “start making economic contributions right away and they’re not living off government assistance for very long.”
A 2015 MPI refugee-integration study found that between 2009 and 2011, the proportion of refugee men working was 7 percentage points higher than among their U.S.-born counterparts. Refugee women were as likely to work as U.S.-born women. Refugees’ income increased the longer they were in the country. The median income of refugees in the U.S. for at least 20 years was $31,000 higher than the median income of refugees here for five years or less.
MPI researchers also found that refugees’ use of public benefits decreases substantially over time.
Unlike other immigrants, refugees can access public health insurance and some other forms of aid when they arrive. Between 2009 and 2011, food-stamp assistance was a relatively high 45 percent for refugees for their first five years or less, the MPI study found. But food-stamp assistance fell to 16 percent among refugees here at least 20 years. Cash aid dropped from 7 percent to 2 percent for refugees in these same respective cohorts. And reliance on public health insurance fell from 24 percent to 13 percent.
Capps and his fellow authors suggested that providing English classes and job training for refugees while they’re still in camps undergoing the long vetting process could lead to even better outcomes. Ironically, the report also suggests, refugees’ high rate of employment in the U.S. could make it difficult for many to find the time to pursue more education to upgrade skills and earning potential.
Even so, as the Center reported in 2017, refugees are readily sliding into jobs in areas where labor is in short supply. Refugees from various countries are filling jobs at a Chobani facility in Twin Falls, Idaho, the world’s largest yogurt factory. And newly arrived refugees from rural areas of the Democratic Republic of the Congo and Asia are finding work at dairy farms.
In 2017, a draft of the refugee fiscal report that Trump had ordered was leaked to The New York Times, which posted it. The report was produced by the U.S. Department of Health and Human Services, whose Office of Refugee Resettlement is involved in refugee arrivals and initial integration. Research looked at both refugees and asylees.
Researchers looked at local, state and federal expenditures on refugees — as well as refugees’ tax contributions to those government coffers over the 10 years between 2005 and 2014.
The study found that 8 percent of refugees received Social Security or Social Security Disability benefits compared to 15 percent of the U.S. population. About 12 percent of refugees relied on Medicare benefits compared to 15 percent of the U.S. population.
On the other hand, 21 percent of refugees used SNAP, or food stamps, compared to 15 percent of the U.S. population. But only about 2.3 percent of refugees received TANF benefits, or cash aid, close to the same percentage as the U.S. population generally.
Overall, during the 10-year period, refugees and their non-refugee family members received $326 billion in government benefits and services, 60 percent from the federal government and 40 percent from state and local government. K-12 education accounted for 11 percent of expenditures on refugees. But that K-12 spending was only 0.4 percent of spending on K-12 nationally.
In the end, because of taxes they paid, refugees and their family members contributed more than $343 billion in revenue to federal, state and local coffers. On balance, refugees contributed $63 billion more than they received in benefits from various programs.
“In general,” researchers wrote, “after 10 years of residence those who entered the U.S. as refugees were similar to the U.S. population in terms of income and employment.”
The HHS draft also referenced research produced in various regions.
A 2012 analysis of the Cleveland, Ohio, area credited refugees with the creation of 650 jobs and $48 million worth of economic impact. A 2015 study of the Columbus, Ohio, area found that about 16,600 refugees supported more than 21,200 jobs and added $1.6 billion to the local economy.
Randy Capps of the Migration Policy Institute cautioned against putting too much faith in fiscal studies that zero in on costs alone. For example, the Federation for American Immigration Reform, or FAIR, a group that advocates slashing legal immigration, published a study in 2018 focusing on the first five years of refugee settlement and arguing that “the American taxpayer is being asked to feed, clothe and shelter” people with “few marketable job skills.”
In 2017, the Center for Public Integrity reported that U.S Department of Homeland Security staff were discussing adding an assessment of a refugee applicant’s “skills” to criteria that’s part of the foundation for the vetting process. The skills idea, confirmed by a Homeland Security spokesperson, upset U.S. refugee officers who screen applicants who’ve fled the trauma of war and persecution. It hasn’t gone anywhere.
“The [current] litmus test is: Does the person have a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group or political
Adding a skills test would mark a profound change, Knowles said, for U.S. criteria developed in the wake of World War II, a time when the U.S. and other countries turned away some desperate Jewish refugees.