U.S. Immigration: Economic Effects and Policy Implications

Immigrants supply labor and skills that are in relatively short supply in the domestic labor market and account for almost half of U.S. labor force growth since the mid-1990s. Surprisingly, only a small fraction of immigrant workers enter on employment-based visas. Because of U.S. law, family-based migrants receive the great majority of permanent resident visas. Among employment-based immigrants, high-skilled workers particularly benefit the economy. Their immigration alleviates shortages in key science, health, and technology occupations and spurs innovation and research and development investment. High-skilled workers also have a positive fiscal impact, contributing more in tax payments than they use in public services. Economic gains from migration begin with immigrants’ participation in the labor force, making employment-based immigration policy especially important because it matches foreign workers to domestic labor demand. Immigration policy that prioritizes work, education, and skills and brings in more high-skilled immigrants is an important reform that will enhance gains from migration.