There has been considerable debate in recent months about whether immigration has a positive or a negative impact on the economy and the lifestyle of the United States. A recent study suggests immigration has a more dramatic impact on economic growth than many people think.
Statistics from the U.S. Census Bureau reveal immigrants are responsible for almost half of the growth of the population of the United States. They are also responsible for a considerable rise in the U.S. labor force.
The report on CNBC was based on assumptions relating to the projected increase in the population and GDP of the United States.
Joel Prakken, senior managing director and co-founder of Macroeconomic Advisers, said projections that the economy will grow by 2 percent link labor size growth to an increase in productivity.
Prakken said immigrants appear to make up a larger portion of the growth in the labor force. The population of the United States is aging but immigrants tend to be younger. They may come to the United States specifically to seek jobs. He said:
“Most people are totally shocked when they actually process the fact that immigrants are already almost half of the population growth, assumed in our 2 percent GDP projection and by the time you get to 2045, 80 percent of it is.”
The increase in the proportion of the population born in the United States is expected to fall due to the aging of the population and declining fertility rates.
Could Moves to Cut Immigration Impact Economic Growth?
Prakken said he’s concerned a proposed bill in the Senate would limit immigration. This legislation would half the 1.1 million immigrants who arrived in 2015 if enacted. Prakken said over a period of time that could dent the growth rate of 2 percent by approximately a quarter point. Over time the impact on the economy could become more progressively more serious.
The census assumes immigration will continue to increase. However, the bill would not allow for any growth.
A raft of studies has pointed to the positive impact immigration has on economic growth. Last year we noted research from the National Academy of Sciences that noted immigration may have a beneficial impact on the wages of local workers.
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