The Economic and Fiscal Consequences of Immigration

In an effort to understand the economic and fiscal impacts of immigration on the United States, the National Academies of Sciences, Engineering and Medicine convened a distinguished panel of 22 economists, sociologists, and demographers, chaired by Francine D. Blau, of the Department of Economics at Cornell University. In a study process lasting three years, the panel pored over the existing scholarly literature and secured input from experts around the United States. The actual report, more than 500 pages in length, is filled with technical jargon that may prove intimidating to the lay reader. Repeatedly, the authors caution readers that immigration cannot easily be isolated as a single causal factor for any economic outcome.  Nonetheless, the panel tried to find areas of consensus. One point of agreement is that high-skilled immigrants have had a significant "positive impact" on the overall economy, stimulating innovation and helping to create jobs.  Without their energy and talent, "patenting per capita" in the U.S. would not be so high.  The authors also review the literature on the "dynamic immigration surplus," which posits that knowledge formation, spurred on by the diversity of backgrounds and experiences of immigrants, can act as "an engine of economic growth."  The authors conclude that "the prospect of long-run economic growth in the United States would be considerably dimmed without the contributions of high-skilled immigrants." With regard to low-skilled immigrants, many of whom help to sustain entire industries in the U.S., some adverse effects may have been felt by immigrants who arrived earlier and teenagers who never finished high school. "While pre-existing workers most similar to immigrants may experience lower wages or a lower employment rate, pre-existing workers who are complementary to immigrants are likely to benefit, as are native-born owners of capital." 

Some analysts have highlighted findings in the report that are supportive of their policy orientation on immigration. Harvard economist George Borjas, for example, a member of the panel of experts that produced the report, but a favorite of the restrictionist right, has published a User's Guide to the report that echoes his long-standing critique of immigration. Coverage, however, in both the Wall Street Journal and The New York Times emphasized findings suggesting the benefits of immigration to the overall economy. The report also assesses the role of immigration in helping to mitigate some of the anticipated fiscal effects of an aging population. The report concludes with a number of recommendations designed to overcome the limitations of existing data sources, including adding a question on the birthplace of parents to the American Community Survey and adding a question on parental educational attainment to the Current Population Survey. (American Immigrant Policy Portal)

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