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© National Immigration Summit, LLC.

How immigration impacts the U.S. economy?

By Ryan Nunn, Jimmy O’Donnell, and Jay Shambaugh | The Brookings Institution

These basic facts suggest that immigrants are taking on a larger role in the U.S. economy


The United States has been shaped by successive waves of immigration from the arrival of the first colonists through the present day. Immigration has wide-ranging impacts on society and culture, and its economic effects are no less substantial. By changing population levels and population growth, immigration augments both supply and demand in the economy. Immigrants are more likely to work (and to be working-age); they also tend to hold different occupations and educational degrees than natives. By the second generation (the native-born children of immigrants), though, the economic outcomes of immigrant communities exhibit striking convergence toward those of native communities.

This document provides a set of economic facts about the role of immigration in the U.S. economy. It updates a document from The Hamilton Project on the same subject (Greenstone and Looney 2010), while introducing additional data and research. We describe the patterns of recent immigration (levels, legal status, country of origin, and U.S. state of residence), the characteristics of immigrants (education, occupations, and employment), and the effects of immigration on the economy (economic output, wages, innovation, fiscal resources, and crime).

In 2017 immigrants made up nearly 14 percent of the U.S. population, a sharp increase from historically low rates of the 1960s and 1970s, but a level commonly reached in the 19th century. Given native-born Americans’ relatively low birth rates, immigrants and their children now provide essentially all the net prime-age population growth in the United States.

These basic facts suggest that immigrants are taking on a larger role in the U.S. economy. This role is not precisely the same as that of native-born Americans: immigrants tend to work in different jobs with different skill levels. However, despite the size of the foreign-born population, immigrants tend to have relatively small impacts on the wages of native-born workers. At the same time, immigrants generally have positive impacts on both government finances and the innovation that leads to productivity growth.

Immigration policy is often hotly debated for a variety of reasons that have little to do with a careful assessment of the evidence. We at The Hamilton Project put forward this set of facts to help provide an evidence base for policy discussions that is derived from data and research.

To READ this complete study: