New Studies Demonstrate The Importance of Immigration to America's Economy

Immigrants are vital to America's economic success. There is a mountain of research to prove it and two recent studies underscore why it's true.

One of the central arguments made by those that want to reduce legal immigration is that the individuals who come to the United States take the jobs of native-born Americans. The argument is based on the notion that there are a set number of jobs in the economy and that every job taken by an immigrant reduces the number available to American workers. Economists have known for decades, however, that the number of jobs in our economy is elastic, expanding and contracting based on a variety of things such as business expansion and innovation.

Forbes: "For more than 100 years, opponents of immigration have promoted the “lump of labor fallacy,” a discredited notion that there is a fixed quantity of labor needed in an economy. The latest research from Michael Clemens, an economist at the Center for Global Development, and Ethan G. Lewis, an associate professor of economics at Dartmouth College, again shows it is wrong to assume new entrants to the labor market mean fewer jobs for U.S. workers."

Clemons and Lewis examined the economic impact of immigrant workers who obtain temporary H-2B visas for nonagricultural work in construction, restaurants, hotels, and other businesses. There is a limited number of such visas granted each year and the number was reduced during the Covid-19 pandemic which contributed to the labor shortage in the United States. The researchers found that firms that could obtain H-2B workers were able to expand operations faster than those that couldn't hire such workers. As they expanded they were also able to hire more native-born American employees. Stated another way, the inability to obtain the qualified H-2B workers they needed was an impediment to expansion that limited a firm's ability to hire more native-born staff.

Forbes: “Comparing firms that were able to hire more workers on these visas to those that were able to hire fewer—by random chance—we find that gaining access to immigrant hires raises firm revenues . . . and also weakly raises, rather than lowers, their employment of U.S. workers.”

Another study examined the impact of highly skilled immigrant stem workers on America's economy. Today, a whopping 19% of all US workers in stem fields like science, technology, math, and engineering are immigrants. 60% of computer science and math PhDs are foreign-born.

Recently, a group of economists including Shai Bernstein, Rebecca Diamond, Abhisit Jiranaphawiboon, Timothy McQuade, and Beatriz Pousada set out to determine how valuable these immigrants are to the US economy.

NPR: The economists find that, between 1990 and 2016, 16 percent of all US inventors were immigrants. More than that, they find that the "average immigrant is substantially more productive than the average US-born inventor." Immigrant inventors produced almost a quarter of all patents during this period. These patents were disproportionately likely to be cited (a sign that they were valuable to their fields) and seem to have more financial value than the typical native-born patent. The economists also find evidence suggesting that immigrant inventors help native-born inventors become more productive. All in all, the economists estimate that immigrants are responsible for roughly 36% of innovation in America.

One of America's greatest strengths is its ability to attract talented and industrious foreign workers. They come to America because we are a melting pot within which immigrants from many nations and cultural backgrounds have succeeded and prospered. Their success contributes mightily to America's technological edge over Russia, China, and India. And, that technological edge means jobs and wealth for all Americans.

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By: Don Lam & Curated Content