The Costs of Closing DACA Initial Enrollments

On July 28, 2020, Chad F. Wolf, the Acting Secretary for Homeland Security, issued a memorandum freezing new initial enrollments into DACA. This paper estimates the economic impacts of this enrollment freeze, on the educational attainment, earnings and federal tax payments of the affected DACA population – those who have turned or will turn 15 after Sept. 2017 – and on state and local tax revenues.

We construct two models of the affected population and its economic behaviors, the first assuming DACA enrollments are immediately reopened, and the second assuming new DACA enrollments remain frozen. We project that over the 2021-30 decade, the youngest members of the DACA population would lose about $6.4 billion in income and productivity, the federal government would lose roughly $2.8 billion in tax revenue, and state and local governments would lose about $705 million in tax revenue.

Since the primary impact of the DACA initial enrollment freeze will be to reduce investment in education, which will in turn sharply reduce these young people’s lifetime earnings profiles, those losses would expand dramatically over time, to about $19.7 billion in lost income and productivity, $7.4 billion in lost federal tax revenue, and $2.0 billion in lost state and local tax revenues in the 2031-40 decade.