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To Deport or Not To Deport: The Fiscal Impact of the Crisis at the Border

In the past few months, the United States border patrol has been strained by a surge of people at the Southern border looking for entry. What makes this particular surge so difficult to deal with
Currently, I am pursuing a degree in Economics with a minor in Mathematical Finance from the University of Southern California. I work as a research analyst and a writer here at the
Currently, I am pursuing a degree in Economics with a minor in Mathematical Finance from the University of Southern California. I work as a research analyst and a writer here at the

In the past few months, the United States border patrol has been strained by a surge of people at the Southern border looking for entry. What makes this particular surge so difficult to deal with is the number of children involved.  Since October 2013, the Border Patrol has apprehended more than 52,000 child immigrants traveling on their own and the projection is that 90,000 will be apprehended by the end of September 2014. Approximately 75% of these children are from Honduras, the murder capital of the world; El Salvador, holding the 5th highest murder rate in the world; and Guatemala, one spot behind El Salvador in this dubious honor.

This leads to the question of whether this is a humanitarian crisis or an immigration crisis. In reality, it’s both. But what responsibility, if any, does the United States have in addressing this crisis? And at what point does the fiscal impact of absorbing so many young children into our society become an unavoidable factor to consider?

Some will say deport them immediately to protect our borders while others will say let them in on humanitarian grounds. The reality is that the former may not have a choice in the matter. Our current laws make it very difficult to deport these children; therefore it’s worth examining the net fiscal impact on the country assuming that the children are allowed to stay.

Laws Surrounding Refugees

The United States is in a tough situation because it isn’t legally allowed to deport the vast majority of these children arriving at the border. In 2008, President George Bush made some slight changes to a human trafficking law ratified in 2002. Although unaccompanied minors coming from Mexico would still be immediately deported upon arrival at the border, the revisions to the law forbade immediate deportations of children from Guatemala, Honduras, and El Salvador on the grounds that the United States should not knowingly deport minors back to dangerous situations (see murder rates listed above).

Basically, once these children arrive at the border, they are processed and placed with relatives or foster care until they can appear in front a judge for an immigration hearing that determines if they can stay in the country.

And there are many indications they might be able to stay in the country. According to the Office of the UN High Commissioner for Refugees, 60 percent of the children coming from Central America put before an immigration judge will likely qualify for some form of humanitarian legal status in the country.

Barack Obama’s Response

President Obama has responded to this influx of children with the promise that he will do everything he can to speed up the deportation process. His message to El Salvador, Guatemala, and Honduras is clear, “Do not send your children to the borders. If they make it, they will get sent back.”

Under current law though, President Obama may not have the legal option to deport these children. For this reason, he has pushed for Congress to make reforms to the 2008 law thereby allowing immediate deportation of all the children that currently qualify as refugees. If he can persuade Congress to change the law, children from Honduras, El Salvador, and Guatemala will be treated like children from Mexico, which make them eligible for immediate deportation upon arrival at the border.

Theoretically, this reform should fly through the Republican held House of Representatives with overwhelming GOP support. The problem may lie in the Democrat-led Senate, reluctant to pass this reform to speed up deportations and pressuring the President to pull back on his position.

However, if the law does not change, many of the children held at the border may be granted citizenship regardless of what President Obama wants. If he cannot successfully change the law, the decision of refugee status is left up to the courts.

Assuming that the law doesn’t change, and that’s a reasonable assumption based on current political gridlock, can the United States afford to absorb all of these children? In the fiscal year 2014, estimates suggest that border patrol will apprehend 67,500 children from Central America. If 60 percent are given refugee status, the United States will have 40,500 Central American children within its borders requiring state and federal services. Can we afford it?

Net Fiscal Impact

When trying to give a good estimate of the net fiscal cost of asylum for these Central American children, it’s reasonable to focus on the costs of education and foster care. Although, it’s important to note for the latter that 85-90% of the children at the border will be placed with parents or a relative in the United States. For our calculations, let’s assume 15% end up in foster care.

To accurately calculate the cost of education, we first need the average cost of education per pupil per year. The National Center for Education Statistics says that per pupil spending is $12,700 per year in the United States. Therefore, an additional 40,500 children would add $515 million per year to education expenses.  

Children are only in school for 6-7 hours a day, though. To find the cost of caring for them outside of school, it’s important to examine the fiscal figures in the US foster care system, to account for the 15%, or 6,100 children, who will be placed in foster care.

According to the Brookings Institution, foster care costs the government (state and federal) about $9 billion per year for roughly 400,000 children in care at any given time. This means an annual cost of $22,500 per child, putting the hypothetical cost of 6,100 new children in the system at roughly $137 million.

Combining those two numbers, the United States is looking at almost $665 million a year to house and educate these children. Importantly though, this doesn’t account for the costs of the 85% of children expected to be placed with relatives or parents.

Costs in the Short and Long Term

And this is just the short-term cost; the long-term costs could be substantial as well. Foster care children are statistically more likely to go on to drop out of high school, become unemployed or homeless, bear children as teenagers, abuse drugs or alcohol, and commit crimes. The long-term fiscal impact on prison costs, welfare benefits, and other costs could be significant as 15% of these children will potentially be subjected to a difficult life while in foster care.

To try to make an accurate prediction for the other 85% of children not in foster care, we can examine the demographics of Central Americans living in the United States. According to the Center for Migration Policy, only 9% of Central Americans living in the US have a college degree, and, among Central Americans, those from Honduras, Guatemala, and El Salvador were the least educated group. All told, 59% of Guatemalans, 55% of El Salvadorians, and 52% of Hondurans lacked a high school diploma. In addition, 30% of Hondurans and 27% of Guatemalans in the US live below the poverty line.

These conditions aren’t exactly conducive to success. Statistics show that children living in poverty have a higher probability of not finishing high school. Also, parents who don’t have college degrees are more likely to have kids that don’t have college degrees. In addition to poor educational attainment, poverty also leads to higher rates of incarceration, particularly for African-American and Hispanic men.

It’s impossible to know the extent of the long-term costs, particularly because foster care and poverty is not a guarantee that these children will grow up with troubled futures. But taking into account available statistics on the troubles that foster children and children of low-income families deal with, it’s not unreasonable to assume that bringing these children into American society could ultimately create a variety of social and economic costs for the United States in the future.

And this is largely out of their control. If all 40,500 children were placed in stable families with parental support and access to good education, then the result would probably be very different. However, the unfortunate reality is that many of these children will likely face a difficult economic environment with limited access to strong educational opportunities upon arrival in the United States.

The Conclusion: To Deport or Not to Deport?

Fiscally speaking, we can absorb the 40,500 children predicted to be granted asylum in the US under current law. It may not be good for the budget (particularly in the long-term), but an extra $650 million per year dispersed through 50 states and the federal government is not going to be a back-breaker. Not even close. And again, the humanitarian value on helping these Central American is impossible to precisely put a price tag on.

But that does not mean we can absorb all of Central America’s children should more families in the region start to make a similar choice. If we don’t change our laws so that we can deport Central American children upon arrival, there will surely be an increase in the numbers that come. There about 30 million people living in Guatemala, Honduras, and El Salvador. We realistically cannot absorb all of their tired, poor and huddled masses, despite what it says on the Statue of Liberty.

And here’s why: roughly 37% of Guatemala’s 14.3 million people are 0-14 years old. That’s a total of 5.3 million children. In Honduras, 37% of the population is also between 0 and 14 years old. Based on a population of 7.6 million, they have 2.8 million children. In El Salvador, 32% of their 6.2 million people lie in the 0-14 age group: another 2 million children. This comes out to a grand total of 10.1 million children between the three countries. So absorbing 40,500 out of that 10.1 million is going to cost us at minimum $665 million per year.

In other words, absorbing 0.4% of the children currently living there will cost us $665 million per year. If more parents make the decision that their children will be safer and have more opportunities in the United States, a conclusion that is no doubt difficult to arrive at but also most likely rational, those costs could easily increase. Absorbing just 4% of those children, a large but not unreasonable figure, would cost us at least $6.65 billion per year.

Ultimately, the decision on what to do with these children depends on how much value one places on the humanitarian aspects of giving these underprivileged children a new raft of opportunity and a safer environment to grow up in. The fiscal impact of absorbing these children is significant but not catastrophic. Even if we absorbed 40% of the children currently living in the region (which is unlikely), $66.5 billion represents a 1-2% increase in our $3.9 trillion federal budget, something that’s hypothetically doable. It doesn't mean it's fiscally sensible, but it's possible to do. 

But giving these children a free pass into this country for simply showing up at our border has broader implications. What do this mean to the millions of people who endured (or are still enduring) the tedious legal process of immigrating to America through the proper channels? Ultimately, it reflects on the dysfunction of our immigration system. And for me personally, I don't think we should allow people (even children) into our country just because they show up to our border. It's sad to say, but there are a lot of children suffering around the world. It is not the responsbility of this country to take care of them. With 16 million of our own children living in poverty and 45% living in low-income families, we have plenty of our own problems to deal with first.

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