El Ignaciano / Junio 2026

Dr. Tara Watson:  The Impact of Immigrants on the US Economy
A review

Lorenzo L. Pérez

Dr. Tara Watson¹ published a primer on the impact of immigrants on the US economy as part of the Brookings research on this topic on March 30, 2026.  This is a timely study since, as the author notes, although the US is often described as a nation of immigrants, immigration has become one of the most contentious political issues in the US.  Each year, Dr. Watson notes, the United States receive new immigrants from around the world including those who come as legal permanent residents (most often relatives of people in the United States), refugees, and those who enter each year on temporary student or work visas.  Many others arrive without visas, either by entering without going through official channels or by coming in as parolees or asylum.

From 2022 through the summer of 2024, inflows in the parolee and asylum-seeker category were very large under what has been described as President Biden’s open border policy, causing net migration to peak over three million in 2023 (compared to about 1 million annually in the 2010s).  The situation has changed dramatically since January 2025 when the second Trump administration at the beginning of its term ended the refugee program, largely stopped considering asylum claims at the border, instituted travel bans for many countries and threw sand in the gears of regular immigration processing for green card applicants, students, and workers. At the same time, enforcement activity has increased the number of deportations.  Dr. Watson and her team estimated that net migration was in negative territory (between -295,000 and -10,000) in 2025 and that it will likely also be in negative territory in 2026.

These developments are unfortunate given the main conclusions of Dr. Watson’s study:

1. Immigration contributes positively to economic growth by expanding the labor force, increasing consumer demand, and supporting overall GDP growth.
2. Empirical evidence indicates that immigrants have historically contributed more in tax revenue than they receive in public benefits, creating a substantial fiscal surplus for the US federal government over time.
3. Migration plays a critical role in mitigating the economic effects of an aging population by increasing the share of working-age individuals who support social programs such as Social Security and Medicare.

The first conclusion regarding the positive macroeconomic impact of immigration is self-evident and it is supported by various references noted in the article.  The main effect of reduced immigration is simply a smaller economy. Moreover, extensive literature documents that immigration to the US has led to innovations that has boosted the productivity of US-born workers.

Regarding the positive fiscal impact of immigration, the article refers to reputable studies that show that from 1994 to 2023, across all levels of government, immigrants paid more in taxes than they received in benefits.  One caveat on this conclusion recognized by Dr. Watson is that many immigrants and their children do use educational and health services funded at the state and local levels whose financial pressures could be ameliorated by policies that help support places welcoming new immigrants.

The change in immigration flows is problematic when the US is entering a period of population aging and declining fertility.  If the US becomes a permanently unattractive destination it would need to be prepared for population decline.  This would worsen the actuarial deficit of the Social Security and Medicare systems.

Dr. Watson study concludes by pointing out that the immigration policy of the Trump administration is against the US national identity which is rooted in pluralism, openness, and rule of law.  Attacks on fundamental principles—the civil rights of immigrants, the notion of birthright citizenship, and restraints on executive powers-strike at the core of what has made America exceptional.  Congress has not passed major immigration reform in 30 years. In the new circumstances that the US is facing, Congress must take its duty to legislate on the immigration issue seriously.  People of goodwill can support new immigration legislation in line with the teachings of Catholic Social Teaching on immigration:  right of countries to control its borders and have legal procedures for immigration, the right of people to migrate to other countries to have better economic prospects or because fear of their personal safety, respect for the human dignity of immigrants, and the establishment of a welcoming environment for immigrants to facilitate their integration in society.

¹ Dr. Tara Watson is Director for Economy Security and Opportunity of the Economic Studies Section of the Brookings Institution.

Lorenzo L. Pérez, PhD. in Economics, Univ. of Pennsylvania, is a retired economist who worked for over 30 years at the IMF, and prior to that worked at the AID and the Treasury Dept. of U.S.A. He is a member of the Editorial Board and nonresident columnist of El Ignaciano.