SF Fed: Immigrants a Boon to U.S.

A new study from the Federal Reserve Bank of San Francisco confirms research by Independent Institute scholars that immigrants improve the U.S. economy as a whole, including employment prospects and wages for native-born Americans:

total immigration to the United States from 1990 to 2007 was associated with a 6.6% to 9.9% increase in real income per worker. That equals an increase of about $5,100 in the yearly income of the average U.S. worker in constant 2005 dollars. Such a gain equals 20% to 25% of the total real increase in average yearly income per worker registered in the United States between 1990 and 2007.

The study found no evidence that immigrants displace native-born Americans’ employment, and that they in fact expand employment opportunities for all. This is partly due to the fact, also confirmed by Independent Institute research, that immigrants’ skills are complimentary to native-born workers’, rather than competitive with them:

U.S.-born workers and immigrants tend to take different occupations. Among less-educated workers, those born in the United States tend to have jobs in manufacturing or mining, while immigrants tend to have jobs in personal services and agriculture. Among more-educated workers, those born in the United States tend to work as managers, teachers, and nurses, while immigrants tend to work as engineers, scientists, and doctors.

In addition, as immigrants fill some jobs, this expands opportunities in that sector, resulting in more jobs overall. Furthermore, the new jobs created tend to be better ones that require the stronger communication skills possessed by native-born Americans, moving low-skilled U.S.-born laborers into better-paying jobs. Overall, states that have large numbers of immigrants produce more, hire more, and pay workers more than states with low numbers of immigrants.

The study concludes:

Data show that, on net, immigrants expand the U.S. economy’s productive capacity, stimulate investment, and promote specialization that in the long run boosts productivity. Consistent with previous research, there is no evidence that these effects take place at the expense of jobs for workers born in the United States.

The summary for the study is here. The full paper can be found here.