Extensive Immigration Study Finds Impact On "Aggregate Wealth Of Natives Is, At Best, A Wash"

Immigration has been and will continue to be a hot button topic in the 2016 presidential campaign.  Trump has called for a wall along the U.S. southern border with Mexico and a halt to all immigration from certain "countries of concern to national security."  Meanwhile, Hillary has called for more relaxed immigration policies that would grant illegal immigrants a path to citizenship and a surge in Syrian refugees. 

But, no matter where you stand politically on immigration, a group of the nation's "smartest" professors from the most elite schools in the country recently came together to publish a 500-page study for the "National Academies of Sciences, Engineering and Medicine" on the economic and fiscal impacts of immigration.  After what must have been countless months of research, the report seems to confirm what most people could have derived from applying simple logic, namely that while immigration expands the economy it also negatively impacts the employment of low-skilled native workers and places undue burden on federal and state entitlements like food assistance programs and Medicaid.

The full 500-page immigration study can be reviewed at the end of this post but here are the key takeaways...

First, the study finds that the lower median age of immigrants is a positive offset to the aging U.S. population and serves to enlarge the economy but notes that the key beneficiaries are the immigrants themselves and not the native citizens.

Immigration enlarges the economy while leaving the native population slightly better off on average, but the greatest beneficiaries of immigration are the immigrants themselves as they avail themselves of opportunities not available to them in their home countries.



That said, low-skilled immigrants, which represented nearly 50% of the total in 2012, were found to have a higher employment rates than low-skilled natives indicating that U.S. citizens are being displaced at least at the lower bound of the income spectrum. 

Shortly after arrival in the United States, immigrant men—especially recent cohorts—experience a disadvantage relative to native-born men in terms of the probability of being employed. However, for cohorts of immigrants arriving since the 1970s, after this initial period of adjustment in which their probability of employment is lower, they became slightly more likely to be employed than their native-born peers. The higher employment rate among immigrant men is mainly represented in the population with education of a high school degree or less.






Finally, first-generation immigrants were found to be more costly for entitlement programs than native-born citizens.

Beyond wage and employment considerations, policy makers and the general public are interested in the impact that an expanding population, and immigration in particular, has on public finances and the sustainability of government programs. All population subgroups contribute to government finances by paying taxes and add to expenditures by consuming public services—but the levels differ. On average, individuals in the first generation are more costly to governments, mainly at the state and local levels, than are the native-born generations; however, immigrants’ children—the second generation—are among the strongest economic and fiscal contributors in the population.


Immigrant households’ use of food assistance programs and Medicaid is much higher than that of native-headed households—not as a result of not working (in 2009, 95 percent of immigrant households with children had at least one person working) but because of lower levels of education and income.

But perhaps, Harvard University’s George Borjas summed up the study best by telling the Wall Street Journal simply that “the impact of immigration on the aggregate wealth of natives is, at best, a wash."