The Deferred Action for Childhood Arrivals (DACA) program, established in 2012, has proven to be a significant economic driver for the United States. According to survey data from the Institute on Taxation and Economic Policy, DACA recipients contribute substantially to the economy, with collective earnings of nearly $27.9 billion and high rates of tax compliance. The program supports both Social Security and Medicare and contributes to state and local budgets through taxes, benefiting communities across the nation. Here’s a breakdown of how DACA recipients bolster the U.S. economy and tax base:
Key Findings on DACA’s Economic Impact
- High Employment Rates: Nearly 91% of DACA recipients aged 25 and older are employed, a significant workforce participation rate that strengthens local economies and creates a more robust labor market.
- Increase in Average Wages: From 2015 to 2022, the average hourly wage for DACA recipients rose by 137.2%, increasing from $11.92 to $28.27. This wage growth reflects not only higher earnings but also an increased ability to contribute to local businesses and services.
- Contribution to Social Security and Medicare: DACA recipients add an estimated $2.1 billion each year to Social Security and Medicare. Since many of these young immigrants may not receive benefits from these programs, their contributions are a significant net gain for public services.
- State and Local Tax Contributions: DACA recipients, along with other undocumented young immigrants eligible for DACA, contribute an estimated $1.7 billion annually in state and local taxes. This amount includes contributions through income, sales, and property taxes, which fund public services like schools, infrastructure, and public safety.
- Potential Revenue Growth with DACA Codification: By enshrining DACA into law and enrolling all eligible immigrants, state and local revenue could grow by an additional $815 million. This increase would further support community services and economic development.
- Economic Consequences of Repealing DACA: Repealing the program would lead to a loss of legal status and work authorization for recipients, reducing estimated state and local revenues by nearly $700 million. This decrease would impact communities that rely on these funds for essential services.
The Broader Economic Impact of DACA
Beyond individual earnings, the contributions of DACA recipients strengthen economic growth through higher employment rates, increased consumer spending, and consistent tax payments. These immigrants’ active participation in the workforce and their adherence to tax regulations highlight the broader value of the DACA program. Codifying DACA could maximize these benefits and secure a stable foundation for future economic contributions, providing both immediate and long-term advantages for the U.S.
