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Ten Economic Facts about Immigration

Michael Greenstone and Adam Looney

INTRODUCTION

The Hamilton Project believes it is important to ground the current immigration debate in an objective economic framework based on the best available evidence. In this policy memo, we explore some of the questions frequently raised around immigration in the United States and provide facts drawn from publicly available data sets and the academic literature.

Most Americans agree that the current U.S. immigration system is flawed. Less clear, however, are the economic facts about immigration—the real effects that new immigrants have on wages, jobs, budgets, and the U.S. economy—facts that are essential to a constructive national debate.

These facts paint a more nuanced portrait of American immigration than is portrayed in today’s debate. Recent immigrants hail from many more countries than prior immigrants; they carry with them a wide range of skills from new PhDs graduating from American universities to laborers without a high school degree. Most recent immigrants have entered the United States legally, but around 11 million unauthorized immigrants currently live and work in America; the majority of these unauthorized workers settled here more than a decade ago. Each of these immigrant groups affects the U.S. economy in varied ways that should be considered in the current debate around immigration reform.

Immigrants now comprise more than 12 percent of the American population, according to recent estimates, approaching levels not seen since the early 20th century. Today’s controversies over immigration echo arguments made a century ago during the last immigration peak. While the demographics of U.S. immigrants have shifted dramatically, the concerns voiced about the social and economic impacts of immigration strike a familiar chord.

A major economic concern is how immigrants influence the wages and employment prospects of U.S. workers. The economic impacts of immigration vary tremendously, depending on whether immigrants are unskilled agricultural laborers, for example, or highly skilled PhD computer scientists. Although their consequences are often conflated, it is constructive to examine the impacts of low-skilled and high-skilled immigrants independently.

Another point of controversy in today’s debate involves the impact of unauthorized immigrants on our economic wellbeing. The best estimates suggest that 28 percent of the total foreign-born population could be unauthorized. According to the Pew Hispanic Center, roughly 60 percent of these unauthorized immigrants are from Mexico. (However, unauthorized immigrants make up only about 21 percent of U.S. residents of Mexican heritage.) When possible, we try to differentiate the figures to more closely understand the different effects—positive or negative—that unauthorized workers may have on the economy.

Of course, there are many factors at play and the economic evidence is only one piece of the puzzle. These facts are designed to provide a common ground that all participants in the policy debate can agree on. In the months and years ahead, The Hamilton Project will return to the issue of immigration as we offer policy recommendations on the economic issues facing the United States.

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