Report: Immigration Leads to Local Job Growth

Written by on October 25, 2013 in Business, Economics, Integration, Visas with 1 Comment

shutterstock_106518758With a nod to boosting economic growth, Atlanta—Georgia’s capital and the ninth largest metropolitan region in the United States—is embarking on a path to be more welcoming to immigrants. Earlier this week, Atlanta Mayor Kasim Reed said the city’s success is tied to the talent and engagement of all of its members, including immigrants. He also stated that the city would officially join Welcoming America’s Welcoming Cities and Counties initiative, and through this partnership, “Atlanta will continue to work on welcoming, including, and supporting the economic and social contributions of immigrants to enhance our city’s cultural fabric, economic growth and global competitiveness.” The Mayor went on to say, “Our country has always been a nation of immigrants and entrepreneurs. […] immigrants from around the world have kept our workforce vibrant and on the cutting edge […] I think that’s a pretty good message on why we should continue [to embrace] immigration.” Clearly, leaders in places like Atlanta, Detroit, and St. Louis all see the advantages of attracting immigrants and entrepreneurs and cultivating welcoming and receptive environments. But what is the underlying impetus for such initiatives? 

A new report by economist Jack Strauss, looking at the broader trends of why immigration helps metropolitan areas, answers that question. Through statistical analyses of 505 metropolitan areas using data from 2005 to 2011, the report finds that immigration helped employment growth and small business creation. First, an increasing number of immigrants moving to an area leads to significantly higher employment growth, a rise in employment share, and a decline in the unemployment rate. Second, immigration to a metro area has a substantially larger influence on job creation than domestic migration to the metro area. Third, rising rates of immigrant entrepreneurship over the last decade has led to greater job creation. The self-employment of immigrants appears to be the mechanism through which immigration positively impacts job opportunities in a metro area.

The report concludes that these issues have “considerable public policy implications as many cities are currently promoting more immigration to improve their economy. Hence, it is critical to analyze the effects of immigration on job growth and unemployment.” As such, the report shows that more immigration to an area leads to job creation, which in turn leads to declining unemployment, along with higher self-employment rates, which creates more job opportunities. The report alludes to the many metro areas—particularly in the Midwest—that are confronted with aging populations and low employment growth. As a growing number of cities across the country, like Atlanta, launch immigration welcoming initiatives to jump-start their economies, the report’s findings offer statistically significant support for the importance of such efforts.

Despite the lack of action by House leadership to pass immigration reform at the national level, researchers note the opportunities immigrants bring to cities and towns throughout the country. Metropolitan leaders see first-hand the entrepreneurship and job creation potential that immigrants can inject into local economies. They also recognize that immigrant entrepreneurship occurs across the business spectrum and that immigrant entrepreneurs come from all sorts of backgrounds and immigration pathways. Cities, therefore, are pursuing local-level policies and initiatives to attract immigrants, cultivate welcoming and receptive communities, and encourage more efficient integration.

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