Immigrants help drive the American digital economy. But they also help keep older folks out of nursing homes

By James Pethokoukis of AEI.

"When confronted with the drawbridge-up politics of immigration restriction, I have frequently noted the importance of global talent to the US economy. For example: In a 2020 analysis from Georgetown University’s Center for Security and Emerging Technology, researchers Tina Huang, Zachary Arnold, and Remco Zwetsloot note that two-thirds of Forbes magazine’s “most promising” US-based AI startups have at least one immigrant founder. Or look at some top CEOs in the American technology sector. Sundar Pichai of Alphabet-Google, Satya Nadella of Microsoft, and Parag Agrawal, the new boss of Twitter, were all born in India.

But the benefits of immigration to native Americans aren’t just about what highly educated newcomers can do for the broad economy. Immigrants also help keep older Americans at home rather than moving into an institution. That’s the key finding in “Immigrant Labor and the Institutionalization of the U.S.-born Elderly” by Kristin F. Butcher (Wellesley College), Kelsey Moran (MIT), and Tara Watson (Williams College). From the paper (bold by me):

The U.S. population is aging. We examine whether immigration causally affects the likelihood that the U.S.-born elderly live in institutional settings. Using a shift-share instrument to identify exogenous variation in immigration, we find that a 10 percentage point increase in the less-educated foreign-born labor force share in a local area reduces institutionalization among the elderly by 1.5 and 3.8 percentage points for those aged 65+ and 80+, a 26-29 percent effect relative to the mean. The estimates imply that a typical U.S-born individual over age 65 in the year 2000 was 0.5 percentage points (10 percent) less likely to be living in an institution than would have been the case if immigration had remained at 1980 levels. We show that immigration affects the availability and cost of home services, including those provided by home health aides, gardeners and housekeepers, and other less-educated workers, reducing the cost of aging in the community.

Or as Butcher, Moran, and Watson also put it, the “reduced cost of inputs to aging in the community such as caregiving and household services” influences the choice of home versus institutional care. But not just that. BMW point to other research suggesting how immigration affects the quality of care in nursing homes.

Miller et al. (2009) find that mortality of the elderly in nursing homes is elevated in tight labor markets, presumably because the quality of care in institutions caring for the elderly declines as it is more difficult to staff these jobs when unemployment is low. Immigration, on the other hand, may increase the labor available to staff nursing homes. Furtado and Ortega (2020) find that increases in immigration are associated with fewer falls among the elderly in institutions, particularly in competitive markets. Using a similar methodology, Grabowski, Gruber, and McGarry (2020) find that immigration increases nursing home staffing and quality.

Immigration helps older Americans live in the way they want. Most would prefer to live at home rather than in an institution. But, as the BMW paper points out, “more than 45 percent of those age 80 report some form of difficulty with cognition, mobility, sight, hearing, or self‐care.” Moreover, “of those aged 65 and older with disabilities who remain in their communities, over 35 percent hire formal home care.” Bottom line: “Currently, immigrants play a disproportionate role in caregiving and household services, particularly in roles that may be crucial complements to aging in place.”

While losing out in the global high-skill talent competition would be devastating to the US economy, immigrants benefit their new home in all sorts of ways."