Shattered dreams: the economic impact of eliminating DACA

Abstract Since 2012, the Deferred Action for Childhood Arrivals (DACA) program has provided temporary relief from deportation and a work permit for undocumented youth. In recent years, DACA renewals have faced slower processing, mounting legal challenges, and the ongoing risk of revocation. We present a novel imputation for immigrant status, which identifies likely DACA recipients, and provide estimates of the income losses stemming from the potential elimination of the program. Because recipients are young, current earnings understate their lifetime contribution to the U.S. economy; our estimates account for this, and for uncertainty around key calibration parameters. We estimate that losing work authorization could lower the earnings of the average DACA recipient by nearly $$\$9900$$ $ 9900 annually, or $$\$5.3$$ $ 5.3 billion for the approximately 540,000 recipients in 2023. Incorporating a likely feasible volume of removals, affecting half of the DACA-eligible population, raises annual losses to $$\$48,000$$ $ 48 , 000 per recipient and $$\$23.0$$ $ 23.0 billion in the aggregate. Lifetime losses in such a scenario reach $$\$260$$ $ 260 billion nationwide ( $$\$544,000$$ $ 544 , 000 per affected individual).