Posted: SEPTEMBER 3, 2025
Economic Impact of Immigration
Crossing Borders, Building Economies
Immigration is a complex issue; it involves people and their human stories first, but it is also an important economic issue. Immigration affects modern economies in profound ways by affecting growth, wages, taxes, innovation, and entrepreneurship.
According to the first census back in 1790, it is estimated that about 10-13% of the white population was foreign-born. As of 2024, immigrants make up 15% of the U.S. population and 18% of the labor force.
Immigration is a complex issue; it involves people and their human stories first, but it is also an important economic issue. Immigration affects modern economies in profound ways by affecting growth, wages, taxes, innovation, and entrepreneurship.
According to the first census back in 1790, it is estimated that about 10-13% of the white population was foreign-born. As of 2024, immigrants make up 15% of the U.S. population and 18% of the labor force.
Share of U.S Population that is Foreign-Born (1850 - 2024)
U.S. Bureau of the Census
U.S. Bureau of the Census
Globally, the United Nations estimates that there are about 280 million international migrants (4% of the world’s population). The U.S. has the largest number of migrants worldwide, with approximately 50 million immigrants, although its immigrant share is comparable to that of other advanced economies.
Share of Population that are Foreign-Born (2024)
United Nations
United Nations
So, what is the implication of this level of immigration for the U.S. economy? Let’s try to break it down:
1
Immigration and Economic Growth: Immigration has long been linked to economic expansion. A 2024 Congressional Budget Office report estimated that adding 1.7 million immigrants per year over five years could boost U.S. GDP by $8.9 trillion by 2034, raising growth by 3.2%.
The reasoning is clear:
Studies have shown that between 2000 and 2022, immigrant labor accounted for nearly 75% of the growth in the prime-age U.S. labor force. But the impact on growth is more complex than just adding more workers. High-skilled immigrants, such as engineers, medical professionals, and researchers, often bring expertise that complements local talent and increases productivity.
The reasoning is clear:
- A larger workforce increases productive capacity.
- More consumers drive greater aggregate demand.
- Skilled immigrants (engineers, doctors, researchers) complement native talent and boost innovation and productivity.
Studies have shown that between 2000 and 2022, immigrant labor accounted for nearly 75% of the growth in the prime-age U.S. labor force. But the impact on growth is more complex than just adding more workers. High-skilled immigrants, such as engineers, medical professionals, and researchers, often bring expertise that complements local talent and increases productivity.
Size of the U.S. Prime Age (25-54) Workforce & Share of Growth by Nativity
Migration Policy Institute
Migration Policy Institute
While immigrants make up only 18% of the U.S. workforce, they represent 28% of all physicians and 33% of the science and engineering workforce with a bachelor’s degree or higher. Their greater share in high skill sectors contributes to scientific progress, increases healthcare access, and contributes to long term growth.
Share of Immigrants in the U.S. Workforce (2019)
- 18%TOTAL
- 28%PHYSICIANS
- 33%SCIENCE & ENGINEERING
2
Labor Market Dynamics: Do Immigrants Lower Wages? A commonly voiced concern is that immigrants reduce wages for native-born workers. To the contrary, evidence suggests otherwise. Research from the Brookings Institution and Pew Research Center finds that the overall effects of immigration are neutral, and sometimes even slightly positive.
Why?
Take the Midwest’s meatpacking towns like Garden City, Kansas as an example. Between 2000–2015, native-born populations dropped 10–20%, but immigrant arrivals increased by about 25%. That influx of workforce kept plants open, sustained schools and hospitals, and even reversed local population decline. Immigration, in this case, was the difference between stagnation and survival.
As Kelly Gauger, Deputy Director of the Office of Refugee Admissions at the U.S. Department of State, told me during my interview:
Why?
- Immigrants are often willing to fill roles native-born workers avoid, especially in agriculture, meatpacking, seasonal jobs, or niche tech roles.
- This “complementary labor” effect allows businesses to grow and create new jobs rather than replacing existing ones.
Take the Midwest’s meatpacking towns like Garden City, Kansas as an example. Between 2000–2015, native-born populations dropped 10–20%, but immigrant arrivals increased by about 25%. That influx of workforce kept plants open, sustained schools and hospitals, and even reversed local population decline. Immigration, in this case, was the difference between stagnation and survival.
As Kelly Gauger, Deputy Director of the Office of Refugee Admissions at the U.S. Department of State, told me during my interview:
What gives me hope is the second generation — the children of refugees. Many parents, especially those in their forties or older, know they may never rebuild a full career here. But they tell us, "I’m doing this for my children."
Kelly Gauger
Deputy Director, Office of Refugee Admissions,
Bureau of Population, Refugees, and Migration (PRM)
Bureau of Population, Refugees, and Migration (PRM)
3
Taxes and Public Services: Do immigrants pay their way? The data suggests, yes!
Yes, new arrivals require investments in schools, healthcare, and infrastructure. But the lifetime contributions they make, more than offset the investments. A 2024 CATO Institute study found the average immigrant adds $626,000 in net present value over their lifetime which is a fiscal win.
- In 2023, immigrants contributed $652 billion in taxes, including $275 billion to Social Security and Medicare according to research conducted by the American Immigration Council
- That’s about 17% of total contributions, almost exactly their share of the labor force.
Yes, new arrivals require investments in schools, healthcare, and infrastructure. But the lifetime contributions they make, more than offset the investments. A 2024 CATO Institute study found the average immigrant adds $626,000 in net present value over their lifetime which is a fiscal win.
4
Enterpreneurship and Innovation: Immigrants aren’t just low wage workers, they’re also entrepreneurs.
And our history is full of immigrant-founded companies that shaped America:
Today, over half of America’s “unicorn” startups (private companies valued above $1B) were founded by at least one immigrant. Collectively, they employ hundreds of thousands of people, and are valued more than $1.2 trillion. Immigrants also drive intellectual property: in 2022, they accounted for 24% of U.S. patents.
As Guc Ozenci, Managing Director at the Founder Institute in Washington, D.C., explained in our conversation:
- Immigrants are nearly twice as likely to start a business compared to native-born Americans.
- Immigrant-owned restaurants alone generate $63 billion annually and employ 1.1 million jobs.
- In construction, a hefty 30% of workers are foreign-born.
And our history is full of immigrant-founded companies that shaped America:
- Procter & Gamble (1837) – was founded by English and Irish immigrants, it is now a $400B company.
- Pfizer (1849) – was founded by German immigrants, today it is worth $200B and is a pharmaceutical leader.
- Google & Nvidia (1990s) – both co-founded by immigrants, they are now cornerstones of the digital economy.
Today, over half of America’s “unicorn” startups (private companies valued above $1B) were founded by at least one immigrant. Collectively, they employ hundreds of thousands of people, and are valued more than $1.2 trillion. Immigrants also drive intellectual property: in 2022, they accounted for 24% of U.S. patents.
As Guc Ozenci, Managing Director at the Founder Institute in Washington, D.C., explained in our conversation:
Immigrants tend to perform higher because they have to. They’ve left everything behind — family, networks, comfort — and face adversity with no safety net. That builds resilience. They listen, learn, adapt, and pivot when needed. In many ways, that ‘adversity muscle’ is what makes them great founders. It helps them discover real customer needs, leave their egos aside, and ultimately scale in the U.S. — the biggest market of all.
Guc Ozenci
Managing Director, Founder Institute, Washington, DC Chapter
Select U.S. based "unicorns" founded by immigrants
- John & Patrick CollisonIrelandStripe
- Ali GhodsiIran / SwedenDatabricks
- Elon MuskSouth AfricaSpaceX
- Hamdi UlukayaTurkeyChobani
5
Challenges and Considerations: The benefits of immigration are clear, but so are the challenges.
The lesson? Smart policy matters. With strong integration programs such as language training, employment support, education funding, the benefits of immigration can far outweigh the costs.
- Education: In California’s Central Valley, by 2020, 20% of students were English learners, straining local school budgets.
- Healthcare: In Texas border counties, hospitals faced $200M annually in uncompensated immigrant care.
- Integration: Europe’s most recent experiences highlight the risks. Sweden and Germany saw slower language acquisition, social tension, and political backlash following large refugee inflows since 2015.
The lesson? Smart policy matters. With strong integration programs such as language training, employment support, education funding, the benefits of immigration can far outweigh the costs.
Final Thoughts
Immigration is one of the most powerful economic forces of our time. It fuels growth, innovation, and entrepreneurship while revitalizing communities. But it also poses challenges that require thoughtful policy.
Handled well, immigration is not just a story of people crossing borders, it’s the story of building stronger economies and more resilient societies.
Immigration is one of the most powerful economic forces of our time. It fuels growth, innovation, and entrepreneurship while revitalizing communities. But it also poses challenges that require thoughtful policy.
Handled well, immigration is not just a story of people crossing borders, it’s the story of building stronger economies and more resilient societies.
Does Immigration Help or Hurt the Economy?
Please let me know what you think in the comments section of the video.