Friday, July 27, 2007

Immigration’s Economic Impact (June 20, 2007)

See this report on the economic impact of immigrants. Listed here are key findings in the report. -Angela

Key Findings
1. On average, US natives benefit from immigration. Immigrants tend to complement (not
substitute for) natives, raising natives’ productivity and income.

2. Careful studies of the long-run fiscal effects of immigration conclude that it is likely to
have a modest, positive influence.

3. Skilled immigrants are likely to be especially beneficial to natives. In addition to
contributions to innovation, they have a significant positive fiscal impact.

General Points

• Immigrants are a critical part of the U.S. workforce and contribute to productivity
growth and technological advancement. They make up 15% of all workers and even larger
shares of certain occupations such as construction, food services and health care.
Approximately 40% of Ph.D. scientists working in the United States were born abroad.
(Source: Bureau of Labor Statistics; American Community Survey)

• Many immigrants are entrepreneurs. The Kauffman Foundation’s index of
entrepreneurial activity is nearly 40% higher for immigrants than for natives. (Source:
Kauffman Foundation)

• Immigrants and their children assimilate into U.S. culture. For example, although 72%
of first-generation Latino immigrants use Spanish as their predominant language, only 7% of
the second generation are Spanish-dominant. (Source: Pew Hispanic Center/Kaiser Family

• Immigrants have lower crime rates than natives. Among men aged 18 to 40, immigrants
are much less likely to be incarcerated than natives. (Source: Butcher and Piehl)

• Immigrants slightly improve the solvency of pay-as-you-go entitlement programs such
as Social Security and Medicare. The 2007 OASDI Trustees Report indicates that an
additional 100,000 net immigrants per year would increase the long-range actuarial balance
by about 0.07% of taxable payroll. (Source: Social Security Administration)

• The long-run impact of immigration on public budgets is likely to be positive.
Projections of future taxes and government spending are subject to uncertainty, but a careful
study published by the National Research Council estimated that immigrants and their
descendants would contribute about $80,000 more in taxes (in 1996 dollars) than they would
receive in public services. (Source: Smith and Edmonston)

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