Sunday, June 24

Council of Economic Advisers: Immigration's Economic Impact

According to the Council of Economic Advisers Chairman Edward P. Lazear, "immigrants not only help fuel the Nation's economic growth, but also have an overall positive effect on the income of native-born workers." They have a full report in PDF available over at the White House web site. You can download the PDF right here.

Here is a summary:
In 2006, foreign-born workers accounted for 15% of the U.S. labor force, and over the last decade they have accounted for about half of the growth in the labor force. That immigration has fueled U.S. macroeconomic growth is both uncontroversial and unsurprising – more total workers yield more total output. That immigrant workers benefit from working in the United States is also uncontroversial and unsurprising – few would come here otherwise.1

Assessing how immigration affects the well-being of U.S. natives is more complicated. This is because immigration’s economic impact is complex and may play out over generations, and because not all natives are alike in terms of their economic characteristics. Even in retrospect it is not easy to distinguish the influence of immigration from that of other economic forces at work at the same time. Nor is it easy to project costs and benefits far into the future. Nonetheless, economists and demographers have made headway on many of the measurement problems. This white paper assesses immigration’s economic impact based on the professional literature and concludes that immigration has a positive effect on the American economy as a whole and on the income of native-born American workers.

Key Findings

1. On average, US natives benefit from immigration. Immigrants tend to complement (not substitute for) natives, raising natives’ productivity and income.
2. Careful studies of the long-run fiscal effects of immigration conclude that it is likely to have a modest, positive influence.
3. Skilled immigrants are likely to be especially beneficial to natives. In addition to contributions to innovation, they have a significant positive fiscal impact.
Interesting perspective during these times of debate.