Study: Border Wall Costs Outpace Benefits to U.S. Workers

Dartmouth and Stanford research the economics of fortifying the U.S.-Mexico border.

The expansion of the U.S.-Mexico border wall between 2007 and 2010 only minimally reduced unauthorized Mexican migration and had an overall negative impact on the U.S. economy, according to  a new study by Treb Allen, the Distinguished Associate Professor of Economics and Globalization, and colleagues at Stanford University.

“Rather than building walls, our study finds that a more effective way of reducing migration is to reduce the incentives to migrate. Promoting economic growth in the sending country by reducing trade costs is a great way to do that, as it also benefits U.S. workers,” says Allen.

The research found that the expansion of the wall, which cost $2.3 billion to construct (the equivalent of about $7 per person in the U.S.), cost college-educated U.S. workers about $4.35 in income a year, while benefitting non-college-educated U.S. workers by an average of 36 cents annually.

The study finds that if the U.S., rather than expanding the border wall, had simply reduced its trade costs with Mexico to better match domestic trade costs, U.S. and Mexican workers would have substantially benefitted.

“Once we accounted for the complex ways the border wall expansion impacted the economy, we found that almost all workers were made worse off. Even those who did benefit did so by a very small amount. This is all the more striking given the substantial construction costs,” says Allen.

The researchers began the work in the summer of 2016 after seeing a need for more empirical evidence on the effects of the border wall amid ongoing debates over immigration, he says.

The researchers examined the U.S.-Mexico border wall expansion that resulted from the Secure Fence Act of 2006, for which 548 miles of additional fencing was constructed along nearly one-third of the 1,954-mile border.

To evaluate the effect of the border wall expansion on migration patterns, the team used confidential data from the Mexican government to examine how migration flows changed after the border wall expansion. The researchers estimate that the wall expansion reduced the total number of Mexican-born workers coming into the U.S. by 0.6 percent, or roughly 83,000 people.

“If the goal of policy is to reduce migration, it’s important to examine what leads people to migrate in the first place,” says Melanie Morten, an assistant professor of economics and faculty fellow at the Stanford Institute for Economic Policy Research. “Mexican citizens tended to migrate to attain higher wages. The wall did not change that.”

The study also examined the projected effect of further expanding the border wall. If the barrier were extended to 50 percent of the remaining border, the researchers estimated, college-educated U.S. workers would lose an additional $7.60 a year, while benefits to less-educated U.S. workers would increase to 58 cents annually.

If, instead of building additional fencing along the border, the U.S. had reduced its trade costs with Mexico so that they were 25 percent closer to domestic trade costs, all U.S. and Mexican workers would have benefitted, according to the study. College-educated U.S. workers would have seen a $80.59 increase in income per year, while non-college-educated U.S. workers would have experienced a $58.67 increase in annual income, the study found.

Co-authored by Allen, Stanford economist Melanie Morten, and Stanford doctoral candidate Cauê Dobbin, the study is part of the National Bureau of Economic Research working papers issued Nov. 19.

Amy Olson can be reached at [email protected].