Another study dealing with Mexican illegals indicated that only three out of thirty persons interviewed received

Obviously, illegal aliens pay sales tax and consequently contribute to the tax base. In addition, there are indications that many illegal aliens may pay income tax. The same is true of Social Security taxes. According to North, seventy-three percent of all illegals he interviewed had income tax withholding deducted from their salaries and seventy-seven percent had Social Security deductions taken out. Perhaps more surprising was the fact that thirty-two percent had actually filed tax returns.

However, it has been pointed out that

some illegals claim more than an appropriate number of

deductions for dependents.

No indication has yet been found

of how widespread this practice is. (North, 1976)

Somewhat contradictory information was developed during

a 90-day test conducted by IRS on apprehended illegal aliens in INS detention centers. Of the 1,699 illegals interviewed, 1,090 had outstanding income tax liabilities. The total amount owed in that test was $247,696, an average per subject of about $140. As a result of this high frequency of

non-compliance, (of modest average amounts), the IRS is currently studying compliance among employers known to hire illegal aliens.

The results of this review are as yet unavailable.

(See pages

Based on the above discussion, we must conclude that research on illegal aliens is very much in its infancy. In spite of the limitations and deficiencies, certain guides to future research are evident. Although this chapter has not attempted to discuss stage(s) of settlement, this aspect of migration may bear a major relationship to the impact brought about by illegal migration. Because of our lack of knowledge we have not used the soft portrait to predict which stage (s) we may be experiencing. A discussion of settlement stage(s) appears in Chapter VI of the report. In instances where there is considerable agreement among researchers, those points of agreement can be used to formulate hypotheses.

hypotheses emerging from this review are:

Some of the

1. The principal impact of the presence of illegal
aliens at this time is likely to be on the labor
market rather than on social services. The nature
of the impact may be dependent upon the stage of
settlement of various groups of illegals. In the
early stages, the illegals tend to be young,
single and male. In the latter stages, they tend
to have families and remain permanently.

2.

A significant percentage of the earnings of

illegal aliens is remitted to the country of origin.

3. Mexican migration may be very different from that originating in other countries by method

of entry, motivation, frequency of return,
education and language ability, and male-
female configuration.

CHAPTER V

DOMESTIC IMPACT OF ILLEGAL ALIENS

In addition to the international forces which establish

must be analyzed.

migrations of people, the domestic impact of illegal aliens As we have noted in Chapter IV, research on illegal aliens is still in an embryonic state, making an exposition of impacts not only difficult but tentative. Nevertheless, some basic outlines of the socio-economic dimensions of this issue can be developed from available research, comparison groups and standard social and economic theory.

Recognizing that (a) the heart of any dramatic policy shifts is likely to be a function of domestic impact and that (b) domestic impact is a vast area of inquiry, the task forces have developed only select themes consistent with the preliminary nature of this project. Presumably, as better information and greater awareness develops, our view of the illegal alien issue will be increasingly influenced by measures of their impact.

The Issues of Employment and Earnings

This section presents hypotheses as to the impact of illegal aliens on the labor market and the income of others, a comparison of the demographic and occupational distribution of the illegals with those of legal immigrants, a discussion of the earnings of immigrants and a discussion of guest worker programs in the United States and Europe.

Much of the concern with regard to illegal aliens focuses on their impact on the labor market, and the resulting effects on the economy as a whole. One concern has to do with the effect on the economy's total output, Gross National Product (GNP). The other is with the impact on the distribution of real income, that is, on relative wages, profits and prices.

GNP and Relative Incomes

Economic theory does suggest hypotheses as to the impact of the presence of, or an increase in the number of, illegal aliens. The total real output (GNP) produced by

the economy increases in response to the greater employment supply due to immigration, whether legal or illegal.

Even the total real income of those already residing in

the United States increases.

31/

However, the gain in

real income is not shared uniformly.

As relative wages for illegal aliens decline in response

to an increase in their labor supply, the owners of firms employing illegal aliens and the consumers of the goods produced by illegal aliens tend to gain through higher profits and lower prices, respectively. On the other hand, the relative

31/ This follows from the standard assumption of a declining marginal product of labor. The marginal product of labor declines if the extra output from an extra million workers decreases as the size of the labor force increases, other factors held constant.