The Economics of Immigration

For Democrats and Republicans, the economy and immigration are important election issues:

Let’s take a look today at how the two issues relate.

Immigration Economics

In a new report, Brookings extensively considers the economic implications of immigration. As the base for their calculations, they present a high and low immigration scenario for each candidate. Predictably, the Harris estimates are higher than Trump’s. Still, the Trump high scenario is close to the Harris low numbers.

The Labor Force

Brookings needed population projections to determine immigrants’ impact on the labor force. Only then could they leap to earnings, consumption, and output.

To begin, you can see Harris’s high at the top and Trump’s low at the bottom. Explaining in the report, they detailed the arrivals and “removals” that led to their numbers:

Next, they needed to determine how many immigrants would enter the labor force. That took them to the 16+ population. There is a vast difference between the Harris high and the Trump low:

Then, considering the impact, they had to look at a slew of variables that included how much of the immigrant population participates in the labor force, who is skilled, unskilled, and who has a college degree.

The GDP

From there, predicting consumer spending and saving, they could move to the GDP:

And finally, by 2034, we move into positive GDP territory for both candidates:

Our Bottom Line: The GDP

When we assess the connection between immigration and the GDP, focusing on the labor force lets us consider the output generated by more or fewer immigrants. Then, the size of the labor force affects consumer spending that, in turn, takes us to investment and hiring.

With fertility rates dipping and the population aging, immigration can be more or less of an offset. And, we have not even mentioned the impact on fiscal policy. Yes, immigrants can require government outlays. But also, they pay more in taxes. According to the National Academies of Science, each additional immigrant could add $326,000 to the national budget during a 75-year span.

So, you can see the variables are gargantuan. Whether you agree or disagree with Brookings’ methods and conclusions we can share one bottom line. Immigration will definitely affect the GDP. And the candidates have inadequately looked at it through an economic lens.

My sources and more: This Brookings Report was where we got most of today’s facts. From there, Pew Research was the ideal complement.