Immigrants and their descendants make valuable contributions to the U.S. economy, according to a new report just released by the National Academies of Sciences, Engineering, and Medicine entitled, The Economic and Fiscal Consequences of Immigration. The exhaustive report is written by a nationally recognized panel of experts. It takes a comprehensive look at the fiscal and economic impact of immigration and provides overwhelming evidence that immigrants and their children are integrating into the social and economic fabric of the country, and are making important contributions as workers, taxpayers, consumers, innovators, and entrepreneurs.
The 500+ page report makes a strong argument for continuing our legacy as a nation of immigrants and ensuring that our immigration policies truly capture all of the benefits that immigrants and their children can provide.
The report is divided into three sections: demographics, economics, and budgets.
- On demographics, the data shows that immigrants today are more educated than ever before and the number of immigrants with bachelor’s degrees and graduate degrees has increased significantly. Also of note is the finding that immigrants complement the native-born workforce in important ways. For example, as the Baby Boomers age and retire, immigrants and their children will be key to supplying the new workers and taxpayers the U.S. economy needs. By 2020-2030, the 3+ generation (which includes all children of U.S. born parents) will no longer fuel the growth of the labor force and instead immigrants and their children will represent the primary growth in the U.S. workforce, according to the report
- On the economic impact, the National Academies found that immigrant workers have little to no negative effects on the wages or overall employment levels of native-born workers. Any detectable negative effects were small and experienced primarily by other recent immigrants and high school dropouts. Furthermore, immigrants play an important role in economic growth due to their high levels of entrepreneurship and innovation.
- As for the fiscal impact, the report found that while first generation immigrants showed a lower fiscal contribution (taxes), the children of immigrants are among the strongest economic and fiscal contributors in the U.S. population overall. Looking at a 75 year time horizon, the report finds that the fiscal impacts of immigrants and their descendants are generally positive at the national level. Some anti-immigrant groups are pointing to one particular model the authors tested, in which the existing national deficit is divided among all Americans. In this scenario, all people–immigrants and native-born alike–show a negative fiscal impact.
At the state level, immigration seems less lucrative largely due to the high cost of educating children–a cost that is not specific to immigrants. But the fiscal cost of immigrants varies a great deal from state to state because immigrants are not evenly distributed across the 50 states, and because each state’s tax policies are different.
One of the most important conclusions of the report is that educating all children is an important investment in our future. While educating children today is costly, states and the federal government will reap large rewards in the future when highly-educated children become adults and start working and paying taxes.
Overall, the NAS study shows that even without reforming our outdated immigration system, the contributions of immigrants are overwhelmingly positive. America’s proud two-century-long tradition of welcoming immigrants is paying off.
Photo Courtesy of Bread for the World.