What Do Economists Think about Immigration

 

When I speak to friends about the impact of immigration, legal and illegal on the United States, they typically argue that the influx of workers causes a drop in wages.  The equilibrium wage drops as the supply of labor shifts outward. 

Increasing supply of labor is only a first step.  Immigrants also buy goods and services, leading to an increase in labor demand.  Wages rise as the demand for labor increases.  Which labor effect is the greatest determines if wages fall or increase with immigration. 

The impact of immigration on wages is only one question economists ask when studying immigration.  Given that they are our countries experts on the economy, it might be wise to learn what they have concluded.

Economists overwhelmingly believe that immigration is good for the United States.  I offer a few pieces of evidence.  In 2017, a group of economists wrote an open letter on immigration to the president, and key members of the Congress.  The letter was eventually signed by 1,470 economists, many of whom I know personally, through study, or by reputation.  They represent all sides of the political and economic spectrum.  The end of the letter reads,

“We view the benefits of immigration as myriad:

• Immigration brings entrepreneurs who start new businesses that hire American workers.

• Immigration brings young workers who help offset the large-scale retirement of baby boomers.

• Immigration brings diverse skill sets that keep our workforce flexible, help companies grow, and increase the productivity of American workers.

• Immigrants are far more likely to work in innovative, job-creating fields such as science, technology, engineering, and math that create life-improving products and drive economic growth.

Immigration undoubtedly has economic costs as well, particularly for Americans in certain industries and Americans with lower levels of educational attainment. But the benefits that immigration brings to society far outweigh their costs, and smart immigration policy could better maximize the benefits of immigration while reducing the costs.

We urge Congress to modernize our immigration system in a way that maximizes the opportunity immigration can bring, and reaffirms continuing the rich history of welcoming immigrants to the United States.”

As a frame of reference, an open letter on a politically controversial topic will often draw about 600 signers, and an open letter response, similar in magnitude, by economists on the other side of the issue.  To my knowledge, and I searched on several occasions, there was never an open letter written by economists who favor more restricted immigration. 

I have provided links to a couple of other, much smaller surveys conducted by the Chicago Booth IGM Forum on immigration issues.  The surveys again include a economists with a wide range of economic and political views.  The exact wording is important, and should not be interpreted beyond the answer to the statement.

Statement 1: The influx of refugees into Germany beginning in the summer of 2015 will generate net economic benefits for German citizens over the succeeding decade. 

When you view the  results, note that 17% of the economists did not respond.  This does not suggest an opinion but rather that they didn’t have time to respond.  At least a couple of those who did not respond, signed the open letter.

Statement 2:  Over the past two years, all else equal, the appeal of the US as a destination for immigrants has changed in ways that will likely decrease innovation in the US economy.

Of those who signed, 72% strongly agreed or agreed with the statement.  Only 2% disagree,  Nine percent did not answer the question.