How immigration helps the US economy: Report

Contrary to popular belief, immigration has benefited the US economy and had little effect on the overall wage gap and job market, according to a report by the The National Academies of Sciences, Engineering and Medicine.

The report updates a 1997 document that detailed the fiscal effects of the 40 million immigrants on the US economy and labor market. The update comes at a time when immigration has come to the forefront of political thought and has become a decisive issue in the presidential election.

When looking at the big picture, the researchers found "little evidence that immigration significantly affects the overall employment levels of native-born workers."

"Immigration enlarges the economy while leaving the native population slightly better off on average," they wrote, "but the greatest beneficiaries of immigration are the immigrants themselves as they avail themselves of opportunities not available to them in their home countries."

While compiling the report, they struggled with gaps in immigration data that made it difficult to distinguish between documented and undocumented immigrants and the effects those groups have on the economic climate. But despite the missing data, the report is the most comprehensive study of its kind.

Yes, they said, an immigration-fueled increase in lower skilled workers can depress wages for other groups of lower-skilled workers, such as previous waves of immigrants, high school dropouts, or teenagers looking for a summer job. However, the effect more often translates into fewer hours for employees than lower wages or less employment.

Additionally, an increasing number of immigrants are highly skilled workers with college degrees and skills that benefit the economy through innovation and entrepreneurship and actually drive up wages and job opportunities for immigrants and native-born citizens, they found. Additionally, second-generation immigrants – people born in the US to foreign-born parents – contribute to the economy as taxpayers and workers.

"The prospects for long run economic growth in the United States would be considerably dimmed without the contributions of high-skilled immigrants," the researchers wrote.

But while immigration has benefited the nation as a whole, the report noted, some areas face increased challenges. Over the next 75 years, the researchers predict, the economic impact of immigration will be "generally positive at the federal level and negative at the state and local levels," due to strain on government resources and programs.

Pia Orrenius, a senior economist with the Federal Reserve Bank of Dallas and a member of the panel that wrote the report, told the Dallas Morning News that using the short-term negative impact to cut funding for schools or other programs that immigrants tend to take advantage of would be foolish, since having an educated workforce is necessary for long-term economic growth.

If anything, she said, "it argues for having a really good immigration policy," so that the labor force can be even stronger in the future.