The long-term benefits of more immigration for the US

In this note, we examine the macroeconomic implications of annual net immigration that rises from about 1.1mn in 2023 to 1.5mn by 2033 and stabilizes at that level. That increase would provide a notable boost to the size of the labor force and the economy’s potential by 2050.

What you will learn:

• Contemplating a higher pace of immigration may seem unrealistic in the current political climate, as a surge of immigrants is straining government resources in many areas, prompting calls for less immigration. However, we think sentiment toward immigration may shift over time as an aging, native-born population makes finding workers increasingly difficult.
• A higher pace of immigration would ease the burden on programs like Social Security and Medicare, making it more palatable to lawmakers confronted with long-term fiscal challenges. Our analysis assumes a small increase in government investment to fund infrastructure needs associated with a larger population.
• Using our Global Economic Model, we find that our higher-immigration scenario would boost the working-age population by 6.5mn by 2050 and the labor force by 4.2mn. That growth in labor supply would boost potential GDP by 2% by 2050.