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Dallas Fed Report Offers Comprehensive View of Texas Immigration

Texas benefits economically from immigration surge, but also faces fiscal, socioeconomic challenges

For immediate release: November 21, 2013

DALLAS—While Texas benefits from having a large, diversified immigrant population, the state faces several challenges to ensure its continued economic advancement, according to a special report from the Federal Reserve Bank of Dallas.

In “Gone to Texas: Immigration and the Transformation of the Texas Economy,” Pia M. Orrenius, Madeline Zavodny and Melissa LoPalo provide a comprehensive portrait of Texas immigrants and examine a variety of economic issues related to surging immigration to Texas.

One in six people living in Texas is an immigrant, and this population has risen from 9 percent of the Texas population in 1990 to 16.4 percent in 2012, the authors state.

“The Texas economic success story wouldn’t be possible without migration from abroad and from other U.S. states,” said Orrenius, Dallas Fed assistant vice president and senior economist. “We hope this report will help readers decide how our state should respond to the challenges and responsibilities posed by a large immigrant population.”

Texas immigrants overall have low levels of education, high poverty rates and low rates of health insurance coverage, the authors find. The large number of low-skilled immigrants raises many questions for the state’s future.

“Texas faces several challenges in providing services and a safety net for its immigrant population, given the state’s traditional low-tax, low-services model of government,” the authors write.

Despite these challenges, Texas immigrants do well economically relative to immigrants in other U.S. states, especially when factoring in Texas’ low cost of living. Texas immigrants are more likely to be in the workforce and employed than immigrants elsewhere in the U.S. and immigrants at the top and bottom of education levels also earn as much or more as their counterparts in other states.

The foreign born are an important part of Texas’ high-skilled labor force, composing 16 percent of workers in the state over the age of 24 with a college degree or higher, the authors find. Immigrants make up a much larger percentage of certain occupations, such as computer software developers, mathematicians, computer scientists, and mechanical and chemical engineers.

Texas’ share of illegal immigration is also large, according to the report. Almost 1.8 million unauthorized immigrants—or 43 percent of the state’s foreign born population and 7 percent of its total population—live in Texas.

Texas also has led the nation in domestic migration since 2006, with many migrants coming from states like California, Florida, New York, Illinois and Michigan, the authors say. Domestic migration skews toward high-skilled labor, with nearly 15 percent of recent domestic migrants to Texas holding a graduate or professional degree, compared with 9 percent of the state population as a whole.

Zavodny is a professor of economics at Agnes Scott College, and LoPalo is a research analyst at the Dallas Fed.

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