The effects of immigration on the U.S economy

Last updated on August 8th, 2023 at 12:04 pm

Many of the conveniences that we enjoy in our lives would not exist without the forces of globalization and international migration. From the food that we eat to the technology that we depend on, our lives now are fundamentally intertwined with people, companies, and policies from countries worldwide. The more that we know about the different immigrant communities who call this country home, the better we can understand their unique roles and contributions to our national economy.

How many immigrants live in the U.S.?

Since the early 1960s, the United States has been the top destination for immigrants worldwide; as of 2017, more than 20 percent of the world’s immigrants resided in the United States. Immigrants are a significant portion of the U.S. population, and in 2016, they comprised more than 13 percent of the more than 320 million people who call this country home.

Though Mexico has long been the leading country of origin for U.S. immigrants, recent trends show that people coming from China, India, the Philippines and El Salvador also have significantly diversified U.S. communities.

Naturalization rates are on the rise among more recent immigrants, growing from 14.4 million naturalized immigrants nationwide in 2005 to 19.8 million in 2015. India and Ecuador had the most significant increases in naturalization rates.

Foreign student enrollment at U.S. colleges doubled between 2008 and 2016, far exceeding overall college enrollment growth. In fact, students from China, India and South Korea accounted for more than half of international students pursuing higher education in the U.S. in 2016.

The U.S. black immigrant population, though small, is increasing:  4.2 million black immigrants resided in the U.S. in 2016, up fivefold since 1980. While over half of this population was born in Jamaica (18 percent of U.S. total) and Haiti (15 percent of U.S. total), the number of immigrants originating from Africa has risen 137 percent between 2000 and 2013.

The rise in the number of immigrants in the United States and the diverse perspectives they bring has driven higher and productivity and innovation across U.S. industries and communities. They also contributed extensive amounts of cultural richness, traditions, and communities that are all a growing part of our national conversation.

These immigrant communities mainly thrive in metropolitan areas:  cities provide the familiarity of shared values, accessibility to their origin countries’ culture and a higher density and variety of job opportunities.

effects of immigration on the U.S. economy - where immigrants live
Source: CityLab

The decision about where to live is affected by many factors including family ties, their nationality, refugee status, or legal immigration status, among others. U.S. metro cities with the highest percentages of foreign-born residents nationwide include Miami, San Jose, Los Angeles, San Francisco, New York, and Houston. In fact:

  • New York is home to a high percentage of the country’s Dominican immigrants
  • Miami welcomes a significant proportion of Cubans
  • Almost half of the Houston metro area’s immigrant population are Mexican
  • The highest percentage of the Washington D.C. area’s immigrants hail from El Salvador

Where do immigrants work in the U.S.?

The data shows how visible immigrant communities are in our cities and that visibility quickly translates into their significant, positive economic impact on our national labor force. As of 2017, more than 17 percent of the overall U.S. workforce was made up of immigrants, its highest point in decades. Many immigrants have careers in private household employment, textile manufacturing, agriculture and food production, and hotel work. Increasingly, foreign-born workers also hold high value in STEM fields. They have not only boosted productivity, but also their contributions account for rising shares of U.S. patents in electronics, computing, medical devices, and pharmaceuticals. Since 1990, the percentage of immigrant workers contributing to innovation in science, technology, engineering and math-based occupations in the U.S. has more than doubled.

effects of immigration on the U.S. economy - where immigrants work
Source: Indeed

One cannot overstate the importance of immigrants’ impact on American innovation. More than 75 percent of the patents from the 10 top U.S. patent-producing universities had at least one foreign inventor. Immigrant students, staff researchers, and post-doctoral fellows play significant roles in the development of critical technology such as semiconductor device manufacturing, information technology, pharmaceutical drug development, and optics. The nearly 1,500 patents awarded to these universities in 2017 boasted inventors from 88 countries.

How does immigration affect the U.S. economy?

Despite common misconceptions about the negative impact of immigrant communities on the American economy, immigrants have contributed significantly to its growth, by sparking innovation across industries and improving quality of life. In 2013 alone, immigrants added an impressive $1.6 trillion to the total U.S. GDP. They are also investing their time and creativity in building a prosperous future for all who live here.

Entrepreneurship and economic impact by the numbers:

  • Immigrants are about 10 percent more likely to own a small business than are native-born Americans. One-third of the companies that went public between 2006 and 2012 had at least one immigrant founder.
  • Of the 87 privately held companies currently valued at over $1 billion, over half have immigrant founders.
  • Immigrant-owned and operated business employ millions of native-born Americans and contribute billions in sales, payroll taxes, and Social Security to our national economy.
  • Economic evidence suggests that in addition to boosting economic growth, immigration has a positive impact on the wages of native-born Americans.
  • There is a direct correlation between the contributions of immigrants and an increase in domestic innovation. In fact, in industries where immigrants work, there is a 30 percent increase in patents filed by local inventors.

From innovating in new fields to bolstering the growth of existing industries, we depend on the ingenuity, passion, and creativity of international migrants. In every facet of our lives, it is clear that we are made better by the invaluable contributions of immigrants as together we strive to deliver on the promise of the American economy and the vibrant international communities of this nation that we all call home.