How Does Immigration Fit into the Future of the U.S. Labor Market?

20 Pages Posted: 4 May 2020 Last revised: 7 May 2020

See all articles by Pia M. Orrenius

Pia M. Orrenius

Federal Reserve Banks - Federal Reserve Bank of Dallas

Madeline Zavodny

University of North Florida; IZA Institute of Labor Economics; Agnes Scott College

Stephanie Gullo

Federal Reserve Banks - Federal Reserve Bank of Dallas

Date Written: March, 2020

Abstract

U.S. GDP growth is anticipated to remain sluggish over the next decade, and slow labor force growth is a key underlying reason. Admitting more immigrants is one way U.S. policymakers can bolster growth in the workforce and the economy. A larger role for immigrant workers also can help mitigate other symptoms of the economy’s long-run malaise, such as low productivity growth, declining domestic geographic mobility, and falling entrepreneurship, as well as help address the looming mismatch between the skills U.S. employers want and the skills U.S. workers have. While some might argue that technological change and globalization mean there is less need to admit immigrant workers, such arguments fail to account for both recent data and historical experience. Of course, immigration—like anything else—is not without costs, which are disproportionately borne by the least educated. A plan to increase employment-based immigration as a way to spur economic growth could be paired with new programs to help low-skilled U.S. natives and earlier immigrants so that the benefits of immigration are shared more equitably.

Keywords: U.S. immigration policy, labor market trends

JEL Classification: J18, J61, J15

Suggested Citation

Orrenius, Pia M. and Zavodny, Madeline and Gullo, Stephanie, How Does Immigration Fit into the Future of the U.S. Labor Market? (March, 2020). FRB of Dallas Working Paper No. 2005, Available at SSRN: https://ssrn.com/abstract=3592428 or http://dx.doi.org/10.24149/wp2005

Pia M. Orrenius

Federal Reserve Banks - Federal Reserve Bank of Dallas ( email )

PO Box 655906
Dallas, TX 75265-5906
United States
214-922-5747 (Phone)
214-922-5194 (Fax)

Madeline Zavodny

University of North Florida ( email )

4567 St. Johns Bluff Road, South
Jacksonville, FL 32224-2645
United States

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Agnes Scott College ( email )

United States

Stephanie Gullo (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Dallas

2200 North Pearl Street
PO Box 655906
Dallas, TX 75265-5906
United States

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