US Foreign‐​Born Share Ranks Low & Is Falling Among Wealthy Countries

By David J. Bier of Cato.

"According to new data from the United Nations, the foreign‐​born share of the U.S. population ranked 56^th in the world. Among wealthy countries in 2020, its ranking has fallen from the 43^rd percentile to the 26^th percentile since 2000. Its ranking for per capita growth in foreign‐​born population since 2015 was even lower: the 13^th percentile. The United States is clearly becoming less competitive for talent internationally.

Figure 1 plots the relationship between per capita GDP (PPP) and the foreign‐​born share of each country’s population. The United States ranks 56^th out of 213 countries in the UN data. Moreover, the U.S. foreign‐​born share is visibly far below where the trendline would predict a country of its high per capita GDP would be. Meanwhile, Australia is on the trendline and is roughly where the United States would be expected to be based on its GDP per capita. The United States is about 75 million immigrants short of Australia’s foreign‐​born share.

Figure 2 shows foreign‐​born share in every country with a GDP per capita of $35,000 or more. It makes sense to focus on this group of countries because these are the places that immigrants would be naturally most interested in reaching. Of the 47 countries, the United States sits at number 35 (26^th percentile). This has fallen from the 43^rd percentile in 2000, and that is with a significant assist from its unusually large illegal immigrant population. Including only legal immigrants would drop the U.S. percentage to 40^th of the 47 wealthiest countries. The median for the group of countries is 21.4 percent (Canada). The United States is about 28 million immigrants short of the median foreign‐​born share for wealthy countries.

Figure 3 shows the increase in the foreign‐​born population in each of the wealthiest countries from 2015 to 2020 as a percentage of country population. Restricting the analysis to these more recent changes, the United States ranks even lower—in the bottom quartile (41^st or the 13^th percentile)—among the 47 wealthiest countries. The U.S. permitted an increase in its foreign‐​born population equal to 0.7 percent of its population. For the United States to have reached the median (Spain – 2.05%), it would have had to have allowed an increase of more than 6.8 million immigrants, compared to the 2.3 million—nearly three times as many.

Another way to visualize the United States falling behind in the global competition for labor is in Figure 4: the share of the increase in immigrants in wealthy countries from the increase in immigrants in the United States. From 1995 to 2000, the United States accounted for nearly half of the increase in immigrant population in wealthy countries. From 2015 to 2020, the U.S. percentage had dropped to 12 percent—with 0 percent from 2019 to 2020 (in fact, the U.S. immigrant population slightly declined that year). Overall, immigrants are becoming much more likely to choose other wealthy countries rather than the United States. Other countries are expanding immigration opportunities, while the United States has kept the same basic immigration law with the same outdated caps since 1990.

For instance, Figure 5 focuses on a subset of wealthy countries who have recently surpassed the United States in foreign‐​born share since 2000. This group includes Sweden, Germany, Iceland, Ireland, and Cyprus. From 2000 to 2020, these countries have dramatically leapt past the United States in foreign‐​born share. They are rapidly expanding their foreign‐​born shares by attracting a wide variety of immigrants—asylum seekers, refugees, employment‐​based immigrants, and others.

If the United States wants to stay competitive and keep it the premier destination for business, it should expand legal immigration. It should start by eliminating the caps on employment‐​based immigrants who are already in the United States adjusting to legal permanent residence. It makes no sense to count these immigrants who are usually already employed on a temporary work visa against the cap (particularly, if they were already counted against a temporary work visa cap). But it also needs to reform its outdated immigration categories and processes that can take over three years. When the United States treats its skilled workers so poorly, it is hardly surprising that many choose other destinations."