As Republicans shift their politics on immigration enforcement, if not the policy of mass deportation, now seems as good a time as any to revisit the impact immigrants have had on the nation’s economy.
A study released last month by the libertarian Cato Institute builds on a lot of previous research showing the positive effect immigrants, legal and not, have on the country’s balance sheet — which is a lot.
As you’d expect, the report is filled with numbers that could be numbing were they not so eye-popping. The authors say their long-range study is the first of its kind, measuring the economic influence of immigrants on government budgets over the past three decades.
The study’s topline conclusion: “The fiscal surplus from all immigrants from 1994 to 2023 was $14.5 trillion, compared with a deficit of $48 trillion without immigrants. That means that immigrants cut deficits by nearly a third in real terms over the last three decades.”
Without immigrants, the authors write, the federal debt would already be more than 200 percent of GDP — “a level some analysts fear could trigger a debt crisis.”
Not everyone buys Cato’s conclusions, notably the Manhattan Institute. But even that conservative think tank doesn’t dispute the positive economic impact of immigrants; its main contention is that the amounts in Cato’s study are way out of line.
Further, the Manhattan Institute critique suggests there will be an increasing taxpayer bill as immigrants age and require more services, something it says Cato does not address. (Cato issued a lengthy rebuttal, maintaining Manhattan’s criticisms “vindicate” their study.)
David Bier, the Cato study author, wrote that the Trump administration has a compelling narrative about the costs of immigration to the country, “but it’s simply incorrect.”
“For decades, the structure of U.S. society, by intent and design, was remade to redistribute wealth, resources, property and opportunity from Americans to non-Americans,” Trump’s Deputy Chief of Staff Stephen Miller said in December, according to Bier.
Here’s what Bier says the figures show: “Every year since 1994, when data collection began, immigrants have paid more in taxes than they received in benefits from the federal, state, and local governments. The fiscal benefits have continued to rise, reaching their highest level ever in 2023.”
The economic effect of immigrants, particularly those who are undocumented, has been a subject of research for decades. That focus may have intensified since Donald Trump promised mass deportations during his 2024 campaign and his ongoing efforts to end various protections for immigrants in limbo, such as DACA, the Deferred Action for Childhood Arrivals program that gave temporary legal status to people brought here illegally when they were young.
The many reports conclude a positive impact, but not always. Initial costs are higher for immigrants than native-born Americans, but immigrants often become net contributors over their lifetimes, according to the National Academies of Sciences, Engineering and Medicine.
Understandably, there’s greater interest in undocumented immigrants, which the Trump administration says is the main focus of the deportation campaign.
A study released in 2021 concluded putting the more than 10 million undocumented immigrants in the United States (the estimate at the time; it’s higher now) on a path to citizenship would boost the nation’s gross domestic product by up to $1.7 trillion over the next decade.
The report, by the Center for American Progress and the University of California, Davis’ Global Center for Migration, also said the economy and immigrants would benefit if smaller-scale citizenship actions were taken.
But the impact of the full universe of immigration is important at this time, and not just because the United States is, famously, a “nation of immigrants.” While the current administration likes to say the immigration targets are murderers and other heinous criminals, many other people have been swept up in the enforcement actions: legal immigrants with minor past infractions and, in many cases, those with no criminal record at all, including some U.S. citizens.
Voters across the spectrum have made clear they want secure borders and deportations of bad actors. But the militarized urban assaults by immigration agents that resulted in deaths, injury and some unwarranted arrests — along with legitimate enforcement actions — soured the public on Trump’s handling of immigration, according to polls.
Such surveys generally show continued strong Republican support for Trump’s immigration policies. Nevertheless, with election-year worries, GOP leaders are seeking a different approach, or at least a different tone.
“We’re in a course correction mode now,” House Speaker Mike Johnson said last week, reflecting on changes at the Department of Homeland Security, which oversees immigration operations.
The rough tactics in Minneapolis may no longer be common, but people are still being detained and deported in large numbers, even if the pace is slightly off from earlier. Warehouses are being set up as immigrant jails across the country, and a San Diego County report released last weekend said the average daily population at the Otay Mesa Detention Center had increased by 200 percent in recent years.
The Cato study asks and answers a question likely on many minds: How can immigrants be so fiscally beneficial when the country overall is running such extreme deficits?
Bier, the author, says a big part of the U.S. budget is “pure public goods” — primarily the military and interest payments on past debt — which doesn’t scale with population growth. These are essentially fixed costs or sunk obligations that the government will have to cover whether immigrants come or not.
The Cato study has triggered further debate over whether immigration is at least a partial solution to U.S. economic and budget problems. Beyond the think tanks, there’s some real-time concern about the Trump crackdown leading to a shortage of workers in some areas, hence the president’s stated intention to provide some relief to the agriculture and hospitality industries.
Then there’s the aging U.S. population and lagging birthrate.
The facts lead to the conclusion that immigration indeed is necessary. But the full answer likely rests on the parameters regarding high- and low-skilled workers, legal and undocumented status, refugees and asylum seekers, extension of government services and more.
In other words, as always, it comes down to who should be let in.