Immigration stamp in passport

Investing

Illegal Immigration Linked to Higher Home Values and Reduced Crime

October 09, 2019 | by Francesca Ortegren

Immigration stamp in passport

Immigration is consistently a hot-topic issue in U.S. politics, particularly in terms of monitoring and controlling illegal immigration. And while there are plenty of data on the effects of immigration, many myths are nevertheless ingrained in popular opinion.

Broadly, there are three categories of immigrants: those who were born in another country (foreign born) but have since become U.S. citizens, authorized residents, and unauthorized residents. Authorized residents are foreign-born people who are in the U.S. legally as permanent residents (Green Card holders), asylum seekers, or temporary visa holders. Unauthorized residents — those who do not have the appropriate documentation for entry into the U.S. — are commonly referred to as illegal or undocumented aliens / immigrants.

According to the Census, immigrants made up approximately 12.5% of the U.S. population in 2007. That percentage increased steadily — albeit slowly — over the next decade to 15% of the population in 2016.

That steady increase in the immigrant population has caused concern across the nation: concerns that immigrants cause economic decline, fewer jobs, and more crime. President Trump and previous presidents have pushed the narrative that immigrants, particularly illegal immigrants, are dangerous people who bring drugs and violence into American communities.

Despite the larger immigrant population and a relatively steady unauthorized population (4% in 2007 to 3% in 2016), the U.S. has experienced sharp drops in crime rates, lower unemployment rates, and GDP growth. So are those concerns really warranted? In this study, we assessed whether immigration (both legal and illegal) impact the American economy and crime rates.

To do so, we analyzed data from the Pew Research Center, Zillow, and various government entities (see methodology for specific data sets). For most analyses, we ran regression models that allowed us to estimate whether the immigrant population predicts other factors (like crime). We also explored statistical differences in economic variables based on whether someone is a native citizens, foreign citizens, or foreign resident using analyses of variance (ANOVAs). These are further explained in the respective sections and in the methodology section.

Key Points:

  • Home values increase $0.14 for each illegal or legal immigrant in a metro area

  • Overall crime rates are not related to immigrant prevalence, but forcible rape crimes decrease with an increasing illegal resident population

  • Undocumented immigrants don't commit crimes at a rate different than national averages

  • Legal immigrants are 91% less likely to commit a crime than native citizens

  • Foreign-born citizens are less likely to be unemployed than native citizens or foreign-born residents (who are unemployed at similar rates)

  • Foreign-born citizens also make higher median incomes than native citizens and foreign-born residents

  • Immigrants are more likely to be self employed than native citizens

  • Immigrants do not receive more public assistance than native citizens

Economy

Home Prices

To assess whether home prices relate to immigration, we analyzed immigration data described above and average annual Zillow Home Value Index prices from 2007 and 2016. We used multiple regression analyses to evaluate whether the rate of unauthorized and authorized immigrants immigrants (out of every 100,000 people) influenced home values. We controlled for population and the cost of living in each metro to ensure that these variables weren't influencing home prices.

The presence of authorized and unauthorized immigrants were both positively related to home values. More specifically, home values increase one dollar for each additional seven unauthorized immigrants (per 100,000 residents). The same was true for authorized immigrants. Put differently, home values increase $0.14 for each immigrant in an area. So, if a metro area has a median home price is $150,000, we'd expect an additional 100,000 immigrants to increase home values 9% to $164,000.

The relationship between the immigrant population and home values is a complicated one and a reason for the relationship is difficult to pin down. Additional immigrants may simply increase the demand for housing, which in turn increases prices. Foreign-born citizens are just as likely to own a home as native citizens and many (35%) non-citizen immigrant residents own homes in the U.S. Therefore, it's certainly reasonable to assume that as more immigrants enter an area, the prices increase as a result of demand.

It's also possible that the increase in home prices is a reflection of larger economic changes in areas that have an influx of immigrants. If this is the case, immigrants could have a direct impact on the local economy or booming economies might attract immigrants. This is discussed in more detail below.

Employment and Wages

Due to a lack of data related to employment and wages for illegal immigrants, we compared native citizens, foreign-born citizens, and foreign-born residents who were not U.S. citizens. The latter group consists of both authorized and unauthorized residents. We compared those three groups using data from the American Community Survey.

Foreign-born citizens are significantly less likely to be unemployed (6%) than native citizens and immigrant residents, who have similar rates of unemployment (~8.5%).

Foreign-born citizens also made a significantly higher average median income ($59,554) each year between 2010 and 2017 than did native citizens ($54,765), both of whom earned more than non-citizen residents ($40,855).

Non-citizen residents received more public assistance income annually ($4,198), or income received from general assistance and Temporary Assistance to Needy Families (TANF), than did naturalized ($3,899) and native ($3,472) citizens. But native citizens received more supplemental security income ($9,273) than did naturalized citizens ($8,766). Non-citizen residents incurred less supplemental security ($8,529) income than either group of citizens.

Overall, the average U.S. citizen receives similar average income from public assistance supplemental security income than does the typical alien resident. Those residents are just as likely to be employed and more likely to be self-employed than native citizens, meaning they're adding to the national economy and creating more jobs.

Economic Changes

These findings on housing value and employment align with other research that suggests immigrants net a positive outcome on our economy, regardless of their documentation. Again we have a “chicken and egg” problem as to whether immigrants cause those changes or economic changes influence where immigrants settle.

Research by the New American Economy Research Fund supports the former by showing that immigrants add $3.7 trillion to housing wealth in the United States and immigration has helped revive rural and less-desirable areas. The renewed interest in those areas could promote growth and revitalize the economy in many metro areas the immigrant population increases.

Influxes in immigrant population also causes micro-level economic changes within metro areas. Overall home prices tend to be higher in metros with larger immigrant populations and local migration might be to blame. That is, more immigrants in a particular neighborhood can cause native habitants to move to different areas of the metro. The resulting immigrant enclaves typically experience slower growth than other areas in the metro, but the net sum of the metro area is positive. Therefore, it's possible that immigrants spur growth indirectly.

Another explanation could be that immigrants are attracted to areas already booming economies. A typical trend in migration in the U.S. is that people tend to be attracted to areas that have a larger population of people like them, so it's possible that immigrants flock to metros that already have large populations of people from their home countries. Those cities tend to be large metro areas like Los Angeles, CA or New York City, NY. Research from Pew shows that 60% of unauthorized immigrants live in 20 metro areas, which suggests that it's possible new immigrants move to these areas because there's more opportunity in areas with more economic development.

Crime Rates

Nationwide

Incarceration costs the American taxpayer a lot of money. According to the Departments of Justice (DOJ) and Homeland Security's (DHS) quarterly alien incarceration release in June 2018, immigrants in DOJ custody cost approximately $1.4 million per day. And among those 19,688 immigrants, approximately 93% were undocumented.

Those numbers are meant to be a startling depiction of the criminal nature of undocumented immigrants, but 56% were in custody for immigration-related offenses. While those offenses are still crimes, they're far from murder or rape. A more realistic look at offenses shows that only 2% of incarcerated unauthorized immigrants were charged with a violent crime (murder, forcible rape, robbery, aggravated assault), 5% for weapons violations, and 5% for property offenses (burglary, larceny and theft, or vehicle theft).

The proportion of immigrants who are arrested for those crimes is actually less than national averages, though. More specifically, the Bureau of Justice Statistics reported that 2.3% of federal arrests in 2016 were related to violent crimes, 5.3% for weapons violations, and 7.2% for property crimes. These figures suggest that unauthorized immigrants aren't committing crimes at a different rate than U.S. citizens.

The only offenses outside of immigration-related crimes that were more common in the unauthorized immigrant population were those related to drugs: drug-related offenses made up 16% of all federal arrests, and 24% of crimes committed by unauthorized immigrants.

While 1 in 4 incarcerated illegal immigrants is in custody due to a drug charge, larger populations of undocumented aliens actually correlate to fewer drug-related problems. According to a peer-reviewed study, there were fewer drug-related arrests, driving under the influence charges, and drug overdose deaths in areas with increased undocumented immigrants between 1990 and 2014.

To further assess whether there's a relationship between crime rates and immigration, we analyzed data from 146 metropolitan statistical areas across the United States. We used multiple regression analyses to assess whether there are relationships between rates of authorized and unauthorized immigrants in an area and crime rates. We controlled for population in each metro area to ensure the number of people overall weren't skewing our results.

Neither the overall rate of property crimes nor that of violent crimes was related to the presence of immigrants (regardless of their documentation).

When evaluating individual subcategories of property and violent crimes, we found that the presence of authorized immigrants predicted fewer murders and fewer crimes related to larceny and thef and the presence of unauthorized immigrants coincided with a decline in rape, but was not related to any other violent crime. The only type of crime that increased with increases in immigrants (regardless of their legality) was vehicle theft.

These findings are consistent with previous research that suggests immigrants are less likely than native citizens to commit crimes or be convicted of a crime.

Individual Metros Compared to the U.S.

We assessed crime rates in three metros with large unauthorized immigrant populations: El Paso, TX (7% of the population), Los Angeles, CA (8%), and Phoenix, AZ (6%).

El Paso is located on the Texas-Mexico border. The city infamously built a 57-mile-long fence along the border in 2009, which is speculated to have decreased illegal immigration and crime. The fence likely didn't deter undocumented immigrants from moving to El Paso: the decrease in unauthorized immigrants (as a proprotion of the overall population; -2%) was smaller than that of the national average (-18%) between 2007 and 2016.

And while overall violent crime did decrease from a rate of 400.3 per 100,000 people in 2007 to 387 per 100,000 in 2016, that decrease was 52% less than the U.S. average change. Put differently, violent crime dropped across the whole country during this time at a faster rate (18% nationwide) than the rate in El Paso (8%). In fact, all types of violent crime declined slower in El Paso than they did on average, so it's unlikely that the border fence had anything to do with their drop in crime. Property crime declined 76% faster in El Paso than it did nationwide.

The unauthorized population in Los Angeles decreased almost 30% between 2007 and 2016 (compared to only an 18% decrease nationwide). Despite that rapid decline in undocumented immigrants, the metro area's rape rates increased by 72% — 115% faster growth than the U.S. overall. The area also saw a 472% larger decline in murder rates than the U.S.

Phoenix's undocumented population decreased by over 50% between 2007 and 2016. The area's crime rates experienced similar changes to those of the U.S. overall in that there were decreases in most types of crime except rape, which increased by 63%. The U.S. saw faster declines in assault than Phoenix, but slower declines in murder, robbery, property crime, burglary, larceny, and vehicle theft rates.

Takeaways

In general, the rhetoric that suggests most immigrants are detrimental to society and the economy are largely inaccurate. Our research is consistent with other sources that have highlighted the positive effects of immigration.

This study highlights the fact that illegal immigrants likely do help the economy and that crime rates are not related to the presence of immigrants. Importantly, unauthorized immigrants are disproportionately represented in the criminal justice system, especially in border states. It's possible that overrepresentation has contributed to inflated criminal charges, particularly those related to drug crimes.

The current policies and those proposed by the Trump administration make it more difficult to immigrate legally and aggressively prosecute those who enter illegally as an alternative method. Unfortunately, there's not much evidence that suggests illegal immigration negatively affects the country or individual communities, so adding to the already high burden of paying for incarceration may not be the best answer.

Moreover, the Trump administration has recently made moves to reduce legal immigration even though there's even less evidence that documented immigrants are dangerous or “bad” for the economy. In fact, legal immigrants are 91% less likely to commit crimes, more educated, make more money, and are more likely to be self-employed than native citizens.

While these analyses are correlational in nature, there are strong relationships between an increased presence of immigrants and better economies, lower crime rates, higher home values, and fewer drug-related deaths. Therefore, future immigration reform policies should consider the positive impact of making legal immigration more accessible.

Methodology

For estimates on the number of unauthorized residents, we used data from the Pew Research Center. Their estimates were derived from the census and included data for 182 metropolitan statistical areas (MSAs) in the United States in 2007 and 2016.

To calculate estimates of authorized residents, we subtracted the estimated number of unauthorized residents in each metropolitan area from the estimated population of foreign-born residents who were not U.S. citizens (taken from American Community Survey, ACS, estimates). We used ACS estimates of native citizens without any additional calculations.

For crime estimates, we used data from Federal Bureau of Investigations (2007 and 2016), which releases annual metro-level crime statistics related to violent and property crimes. National crime rates were taken from the DOJ and DHS quarterly alien incarceration release and the Bureau of Justice Statistics federal justice statistics 2015-2016 reports.

To analyze whether the population of immigrants predicted different types of crime, we ran multiple linear regressions. One regression was conducted with the rate of each type of crime (overall violent, overall property, murder, forcible rape, robbery, aggravated assaultburglary, larceny and theft, and vehicle theft) as a outcome (or “dependent”) variable.

We analyzed unauthorized and authorized immigrants as separate predictor variables. Immigrant populations were calculated as the rate (per 100,000) of unauthorized and authorized immigrants for each metropolitan area. For each analysis, we controlled for MSA population estimates.

To assess home values, we used Zillow Home Value Index (ZHVI) for each metro area in 2007 and 2016. We again conducted multiple regressions to examine the relationship between immigrant populations and home values. Immigrant populations (undocumented and documented) were calculated as they were for crime rates. We controlled for cost of living (as estimated by the regional price parities each year) and population in the metro.

For employment and wage analyses, we used data from the ACS in years 2010, 2012, 2013, 2014, 2015, 2016, and 2017. We averaged all variables across years in order to evaluate the overall differences in residents.

We analyzed statistical differences in foreign-born naturalized citizens, foreign-born residents, and native citizens using analyses of variance (ANOVAs) for each employment and income variable. The type of resident was the independent variable and unemployment employment, self-employment rates median household income, public assistance income, social security income, and supplemental security income were dependent variables. For statistically significant ANOVAs, we conducted Tukey HSD comparisons for follow-up analyses.

Statistical tests were considered statistically significant at the p < .05 level.