ECONOMIC BENEFITS ASSOCIATED WITH THE VISA WAIVER PROGRAM – A DIFFERENCE-INDIFFERENCE APPROACH

This study evaluates the economic benefit that the Visa Waiver Program, VWP, brings to the United States, including decreased spending on administration and increased tourism. To capture the net effect of VWP due to increased tourism, this study conducts a semi-experimental evaluation by introducing a control group – it pairs a VWP member country with a non-member country. The results show a net increase of 3-4.5 tourism/business trips per thousand population for a VWP participating country. It concludes that in 2010, because the VWP was in place, the U.S. government has saved from 1.9 billion to 3.2 billion for the cost of interviewing visitors. In sum, this research provides more concrete evidence to the discussion of VWP’s future expansion.