For 19 years, Karla Morales Villalobos has had a typical American life, going to school, working and having fun on the weekend. But now, the 22-year-old college student is fighting to keep her family together in federal court. As a 3-year-old, she was “brought here by family? not out of luxury … but out of necessity,” and is now about to be deported to a country she hasn’t lived in since she was a baby. Why? The Trump administration wants to end Temporary Protected Status (TPS) for hundreds of thousands of people based on their country of origin. Our new research indicates that mass deportations could have an adverse effect on stock markets.
Karla is one of the 417,341 people who are currently granted Temporary Protected Status. This program allows people to stay in the U.S. to avoid natural disasters or dangerous conditions in their home country. Karla’s family, for example, came to the U.S. after an earthquake devastated El Salvador.
President Donald Trump’s administration is currently working to end TPS protections for people from Haiti, Honduras, Nicaragua and El Salvador. Ending the program is in line with the administration’s efforts to limit legal immigration, but that doesn’t mean it will be particularly helpful to the country or the economy. In our new study we show that protecting immigrants through TPS provides a financial boost to some U.S. companies. Not only is protecting the weak, poor and huddled masses a fundamentally American value, but it might be great for business.
We looked at two events that granted legal protection to immigrants. First, the Immigration Act of 1990, which granted legal status to immigrants from Latin American countries. And second, the 1999 Temporary Protected Status order, which followed Hurricane Mitch and protected nearly 90,000 immigrants from Honduras and Nicaragua.
After both legislative events, stock prices of industries that require a lot of workers surged past less labor-intensive ones. Agriculture, construction and manufacturing all rely on a large number of workers. After the reforms, these industries outperformed the market by over 170% in annual terms.
Karla and her family are also an example of the long-term effects that immigrants have on the economy as a whole. After 18 years in the U.S., her parents have helped her and her siblings succeed. Karla is studying biology at the University of Massachusetts-Boston and when she graduates, she’ll join the American workforce. As a college graduate, she’ll be contributing to different fields that may boost the U.S. economy even more.
If TPS is ended, people like Karla and her family may be sent to countries that are still dangerous or recovering from natural disasters. What’s worse is they will also no longer contribute to the economic success of America.
Given the economic benefits of programs like TPS, policymakers should be looking to create legal pathways to citizenship for the hard-working people that make this country great.
Ben Blau is a professor of economics and finance at Utah State University and a co-author of the study on the economic effects of Temporary Protected Status. Josh T. Smith is a research manager at the Center for Growth and Opportunity at Utah State University.