At the heart of the debate over illegal immigration lies one key question: are immigrants good or bad for the economy? The American public overwhelmingly thinks they’re bad. In a recent New York Times/CBS News poll, 74 percent of respondents said illegal immigrants weakened the economy, compared to only 17 percent who said they strengthened it. Yet the consensus among most economists is that immigration, both legal and illegal, provides a small net boost to the economy. Immigrants provide cheap labor, lower the prices of everything from produce to new homes, and leave consumers with a little more money in their pockets. They also replenish—and help fund benefits for—an aging American labor force that will retire in huge numbers over the next few decades. So why is there such a discrepancy between the perception of immigrants’ impact on the economy and the reality?…

There’s another distortion in the way immigration’s costs and benefits are parceled out. Many undocumented workers pay money to the federal government, in the form of Social Security contributions and income taxes, and take less in return, says Gordon Hanson, an economist at the University of California, San Diego. At the state and local level, however, it’s a different story. There, illegal immigrants also make contributions, through property and sales taxes, but on balance, they use more in public services, such as schools, health benefits, and welfare assistance. As a result, says Hanson, the federal government ends up with a net gain in its coffers, while “states get stuck with the bill.”