Mass Deportations of Undocumented Immigrants Could Cost California $275 Billion, Study Finds

Earlier this month, U.S. Immigration and Customs Enforcement (ICE) released a statement in which it said the agency had arrested more than 66,000 undocumented immigrants as well as deported an additional 65,682 people during the first 100 days of President Donald Trump's second term.

ICE's stepped-up enforcement has focused heavily on sanctuary cities, including Los Angeles, as the administration seeks to meet its stated target of 3,000 deportations per day.

As immigration enforcement actions intensify, a new study by the University of California, Merced warns that mass deportations could cause serious damage to the state's economy. The report estimates that removing California's undocumented immigrant population would result in a $275 billion economic hit and a loss of $23 billion annually in local, state and federal tax revenue.

According to a 2025 report by the Public Policy Institute of California, the state is home to 10.6 million immigrants, which equals to about 22% of the entire foreign-born population in the United States.

The UC Merced study, led by public health professor Maria-Elena De Trinidad Young and conducted with support from the California Health Care Foundation, found that 2.28 million immigrants in the state — roughly one in five — are undocumented. These individuals, as noted by the study, make up about 8% of the state's workforce.

Undocumented workers are also responsible for nearly 5% of California's gross domestic product (GDP), the study found. When including indirect economic activity tied to their labor, that figure rises to nearly 9%.

"California has a long and rich history of embracing immigrants and the many valuable contributions they bring to our state, economically, culturally and in so many other ways," Young said. "Understanding how increased immigration enforcement is affecting such a large swath of our population is critical to addressing the fears many in the immigrant community are experiencing and informing how we plan for not only economic and fiscal impacts but the human impacts."

The study also found that undocumented immigrants in California contribute more than $23 billion annually in taxes across all levels of government.

Among the industries most vulnerable to deportation policies are agriculture and construction. More than one-quarter of California's agricultural workforce is undocumented, and the industry's GDP would shrink by an estimated 14% without them, the report said.

In construction, undocumented immigrants account for 26% of the labor force. The study estimates that without these workers, the sector's economic output would decline by nearly 16%.

"Immigrants, both documented and undocumented, are deeply and intricately woven into our overall economic fabric," said Abby Raisz, research director at the Bay Area Council Economic Institute and co-author of the study. "The impact of losing 8% of California's workforce would have a crippling effect on the state economy. These effects would extend well beyond California, with labor shortages contributing to higher food prices nationwide."