Coming to America: Some Facts about Immigration

By James Pethokoukis. 

"With immigration policy currently top of the news — an issue without a lot of emotion swirling around it — I think it would be helpful to add some factual economic context. To that end, I would urge anyone interested in the story of American immigration to read the excellent 2022 book Streets of Gold: America’s Untold Story of Immigrant Success by economists Leah Boustan of MIT and Ran Abramitzky of Stanford. It’s a book that does a lot of myth busting.

For example: Although social media videos might provide a wildly different perception, immigration levels today are hardly unprecedented. Roughly 14 percent of the American population is foreign-born, similar to levels sustained over 50 years during the Ellis Island era.

Migration Policy Institute

Of course, that was then and this is now. Some Americans worry that today’s more globally diverse immigrants and their children won’t integrate as well as past European immigrants. But data in Streets of Gold show that their children have similar intergenerational mobility as European immigrants in times past, rising from the bottom incomes in childhood to median or higher incomes in adulthood — and at the same pace. What’s more, this pattern holds even for children of poor, less-educated immigrants from Latin America and elsewhere. Skilled immigrants earn more upon arrival, matching or exceeding average US-born incomes in some cases. Less-skilled immigrants start at lower incomes in manual labor jobs, but they, and especially their children, see earnings growth over time. Within one generation, even children of poor immigrants reach average US income levels.

But, wait, maybe immigrants are doing too well and that success comes at the expense of native-born Americans? According to Streets of Gold, such a zero-sum view is dead wrong.

Consider: Immigrants are both workers and consumers. They create new businesses like nail salons that wouldn’t exist without immigrant entrepreneurs and labor. Research largely finds local immigrant arrivals increase, rather than decrease, native-born opportunities, with the main exception being upward pressure on housing costs. (Build, baby, build.) The clearest negative effect is competition between new and established immigrants in similar occupations like nail techs. But other native-born or settled immigrants work in complementary jobs. So, while some substitution effects occur, especially affecting recent migrants, the bigger picture shows immigrants stimulating economic expansion and new kinds of jobs.

But can there be too much of a good thing? I asked Boustan that very question in a podcast chat last year, and she gave me this fascinating response:

Right now, we have around a million legal entrants to the US a year. We haven’t seen something on the order of 10 million, so it would be hard to extrapolate from looking at 1 million to say that 10 million might be okay. There are a couple of cases globally when there have been tremendously large inflows of immigration: for example, in Israel with the migration from the former Soviet Union. That was a country of around 6 million people and then 1 million new people entered.

From the US perspective, that would be something like 30 million immigrants or so entering in a single period of time, just over the course of a couple of years. These days we only have a million, so going up to 30 would just seem crazy. You’d think, “Well, there must be so much disruption economically that would come from that.” And yet that’s not what ended up happening in the case of Israel. Now of course, there are a lot of details there. The immigrants that arrived from the former Soviet Union were pretty educated. They all received citizenship right away, so they didn’t face legal barriers to work. They had some ethnic or cultural similarities with the people that they were joining. We can’t learn from that one case to say it would work in other situations. But it is pretty intriguing that when there was a large inflow to a developed country like Israel, there wasn’t the kind of dramatic economic collapse that some people might have predicted.

A good faith reading of the economic evidence, as put forward in Streets of Gold,  powerfully suggests that coming to America improves both the lives of immigrant families and, just as important, the state of their new home."