The Economic Impact of Mass Deportations

EMPCT Working Paper Series No. 2025-09
69 pages | PDF Download | PDF in Browser

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Citation: Cravino, Javier, Levchenko, Andrei A., Ortega, Francesc, and Pandalai-Nayar, Nitya, “The Economic Impact of Mass Deportations”, September 2025

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Abstract
This paper quantifies the effects of large-scale deportation policies on wages, prices, and
real incomes in the United States. We impute the legal status for each worker in the American
Community Survey by combining detailed individual information with group-level visa
records. In 2024, 3% of US workers were unauthorized, but these workers were highly concentrated
geographically, by industry, and by occupation. We then develop a multi-region,
multi-sector, multi-occupation quantitative framework with heterogeneous workers to study
the economic impacts of the removal of unauthorized workers. We state analytical results that
relate region- and occupation-specific real wage and sectoral relative price changes to shocks to
the supply of immigrant workers, observable shares of immigrant workers in occupations and
regions, and combinations of structural elasticities. Following the removal of 50% of unauthorized
immigrants, average native real wages decline in every state, and by 0.3% at the national
level. At the same time nationwide native wages in the most immigrant-intensive occupations
rise by up to 3.4% in our baseline calibration. The deportation shock increases the average
wages of immigrants , by 12.2% for the unauthorized workers remaining in the country, and
3.2% for the authorized. Consumer prices in the sectors with the highest unauthorized presence
– such as Farming – rise by about 1% relative to price of the average consumption basket,
while most other sectors experience negligible relative price changes. The overall cost of living
rises by about 0.7% more in the regions hosting the most unauthorized immigrants, compared
to regions with minimal presence of unauthorized workers.