Immigrants and the Economy

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Many people in the world leave their homes and countries every day to find a new place to live. Some people move for economic reasons, while others are fleeing wars, famine or environmental disasters in their home countries. Regardless of the reason for migration, immigrants play a critical role in society and culture.

Immigrants are a vital part of America’s history, and it is hard to imagine our nation without them. The number of immigrants in the United States is greater than that of any other country, and they represent a major part of the country’s population.

They make up nearly 13 percent of the population and if you include the children of immigrants, they account for about 1 in 4 Americans. While there are still lingering prejudices and popular fears about immigrants, the majority of immigrants assimilate into American society and contribute to the economy.

The Impact of Immigration

One of the most important contributions that immigrants bring to the United States is their ingenuity and cultural diversity. These immigrants and their families have contributed to everything from the invention of new technologies to the development of a diverse national cuisine, music, art and more.

In addition to the benefits of their contribution to American society, immigrants also help to make our economy more efficient and productive. They eliminate slack in the labor market that would otherwise slow down growth, by attracting and filling positions in areas with shortages or bottlenecks.

Another benefit of immigration is that it reduces the wages of competing workers. This is because immigration changes factor prices, which lowers the wages of the workers who compete for the same jobs and raises the return to capital and the wages of complementary workers.

This surplus enables a growing economy to grow faster than it otherwise could. While some of the benefits go to immigrants themselves, most of the surplus is redistributed among natives through higher wages and better employment conditions.

Increasing immigration also decreases the amount of slack in the labor market, which is beneficial to business owners and investors. The reduction in slack allows for more business growth, as the demand for goods and services increases.

The Distribution of Education

In the United States, the majority of immigrants have less than a high school diploma, while a large percentage have a college degree. The average education level of recent immigrants is bimodal: highly educated immigrants from Taiwan, India and Iran are more likely to have a university degree than the native-born population.

Most Mexican and Central American immigrants, however, have no more than a high school degree. Nonetheless, they are able to fill key niches in skilled trades, nursing homes caring for the elderly, and in the service sectors in restaurants, hotels and gardening.

The Distribution of Skilled Labor

Despite their lower levels of educational attainment, the majority of recent immigrants are able to work in some capacity. Their skills range from unskilled construction labour to highly specialized and highly paid professions, such as nurses and teachers.