“The New Americans: Economic, Demographic, and Fiscal Effects of Immigration” by The National Research Council

Summary

2 “In 1994, there were nearly 800,000 legal immigrants. This number is considerably smaller than the number in the peak year of the early twentieth century wave of immigration—1.3 million immigrants in 1913. Moreover, since the resident population has more than tripled during the course of the twentieth century, the number of immigrants in the earlier decades represented a much higher proportion: 13 immigrants per 1,000 resident population in 1913, compared with 3 immigrants per 1,000 residents in 1994. However, immigration now plays a greater role in population growth than it did eight decades ago: it accounts for 37 percent of total growth, partly because of the decline in the fertility rates of residents.”

4-5 “Using a basic economic model, with plausible assumptions, we show that immigration produces net economic gains for domestic residents, for several reasons. At the most basic level, immigrants increase the supply of labor and help produce new goods and services. But since they are paid less than the total value of these new goods and services, domestic workers as a group must gain.
The gains to the domestic economy come from a number of sources. On the production side, immigration allows domestic workers to be used more productively, specializing in producing goods at which they are relatively more efficient. Specialization in consumption also yields a gain.
Immigration thus breaks the rigid link between domestic consumption and domestic production. From this perspective, the effects of immigration are comparable to those of international trade. That the two processes are so similar suggests that, when trade is relatively free, any change in the number of immigrants will affect the incomes of domestic workers less than it would have without trade. […]
Even when the economy as a whole gains, however, there may be losers as well as gainers among different groups of U.S. residents. Along with immigrants themselves, the gainers are the owners of productive factors that are complementary with the labor of immigrants—that is, domestic, higher-skilled workers, and perhaps owners of capital—whose incomes will rise. Those who buy goods and services produced by immigrant labor also benefit. The losers may be the less-skilled domestic workers who compete with immigrants and whose wages will fall. To the extent that immigrants specialize in activities that otherwise would not have existed domestically, immigration can be beneficial for all domestic residents. In this case, there is little substitution of new immigrant workers for domestic workers, and domestic consumers gain from the lower prices of these
services.” !!

5-6 “Overall, in the massive and complex U.S. economy, immigration is unlikely to have a very large effect on relative earnings or on gross domestic product per capita. Among the legions of factors that affect the economy, many are far more critical than immigration, including savings and investment and the human capital of U.S. workers. Immigration over the 1980s increased the labor supply of all workers by about 4 percent. On the basis of evidence from the literature on labor demand, this increase could have reduced the wages of all competing native-born workers by about 1 or 2 percent. Meanwhile, noncompeting native-born workers would have seen their wages increase, and both competing and noncompeting workers may have benefited as consumers.
Overall, barring sizable immigration-induced economies or diseconomies of scale, the most plausible magnitudes of the impacts of immigration on the economy are modest for those who benefit from immigration, for those who lose from immigration, and for total gross domestic product.”

6 “The one group that appears to suffer substantially from new waves of immigrants are immigrants from earlier waves, for whom the recent immigrants are close substitutes in the labor market.” !!

11 “The difference between immigrants and the native-born in program participation
and program expenditures per capita varies greatly across types of government
programs. For some programs, such as Social Security and Medicare, immigrants
receive proportionately lower benefits than the native-born. For other
programs, such as Supplemental Security Income (SSI), Aid to Families with
Dependent Children (AFDC), and food stamps, they receive proportionately more.
Combining the costs of benefits from all programs, there is little difference between
immigrants and the native-born. Immigrants are more costly than natives
during childhood because of the costs of bilingual education, and they are less
expensive than natives in old age. Over a lifetime, these differences tend to
balance out.”

11 “Taking the difference between taxes paid and benefits received at each age,
immigrants (like others) are costly in childhood and in old age, but are net payers
of taxes during their working ages. For this reason, the long-term net fiscal impact
of an immigrant (measured as a present dollar value) varies greatly with age
at arrival. Immigrants arriving at ages 10 to 25 produce fiscal benefits for natives
under most scenarios, whereas immigrants arriving in their late sixties generally
impose a long-term fiscal burden. In fact, most immigrants tend to arrive at
young working ages, which partly explains why the net fiscal impact of immigration
is positive under most scenarios.”

11-12 “The long-term fiscal impact of an immigrant also depends on his or her education:
immigrants with more education have more positive long-term fiscal impacts.
For example, under one set of plausible assumptions, the net present value of the fiscal impact of an immigrant with less than a high school education is
–$13,000; in contrast, the net present value for an immigrant with more than a
high school education is +$198,000.”

12 “under most scenarios, the long-run fiscal impact is strongly positive
at the federal level, but substantially negative at the state and local levels. The
federal impact is shared evenly across the nation, but the negative state and local
impacts are concentrated in the few states and localities that receive most of the
new immigrants. Consequently, native residents of some states, such as California,
may incur net fiscal burdens from immigrants while residents of most states
reap net fiscal benefits.” !!!

1 – The Immigration Debate

17 “the decline in real wage rates over the past 25 years for men with less than a college education has drawn special attention to the status of this group since they are the most likely to compete directly with immigrant labor.”

2 – Background to Contemporary U.S. Immigration

20 “By the early 1980s, 77 million people were living outside their country of birth, 14 million of them (about one in five) in the United States.”

23 “Until 1875, no direct federal legislation restricted admission of aliens into
the country or the automatic qualification of immigrants and their children as
citizens. States and the federal government did, however, impose some restrictions
on immigration before 1875. In the colonial period, several colonies enacted
laws to prohibit the entrance of criminals. After independence, many states
restricted the entrance of paupers from outside the United States. And, before
1875, certain federal provisions affected immigration, such as laws to prohibit
Chinese “coolies” on American vessels.”

23 “Until 1860, virtually
all immigrants to the United States were from Germany, Ireland, and the
United Kingdom. After 1860, growing numbers came from Scandinavia, China,
and South America, drawn by the job opportunities in the expanding American
West. In the 1860s, for instance, about one-third of the western miners were
Chinese.”

29 “The primary purpose of the Immigration Reform and Control Act
of 1986 (IRCA) was to decrease the number of illegal immigrants by limiting
their flow and by legalizing the status of illegal aliens already residing here. To
accomplish the first goal, IRCA strengthened the Border Patrol and established
penalties for employers who knowingly hire illegal immigrants—the so-called
employer sanctions. It also set up a program that would admit agricultural workers
when not enough native farmworkers were available; however, this program
has not been used to date. The result of IRCA was the legalization of about 2.7
million persons who were residing in the United States before 1986 as illegal
immigrants.”

30 “during the first five years of their residence in the United States, [The Personal Responsibility and Work Opportunity Reconciliation Act of 1996] restricts access to and use of public assistance programs for legal immigrants who are not citizens. It also bars noncitizen immigrants who have been here for more
than five years from some federal welfare programs. […] The act also sets a lifetime limit of five years on the use of public assistance by any individual—a restriction that applies not just to legal immigrants but to all residents.”

33 – 34 + NOTE 14 “the U.S. population was 263 million in 1995, more than three times the 76 million of 1900, and it will probably reach about 277 million in 2000. The number of immigrants has grown, too, but the ratio to total population is now about one-half that of the early twentieth century—5 per 1,000 for 1990-2000 compared with 11 per 1,000 in 1900-1910. […]
Relative net immigration is also lower than it was a century ago; it was 4.0 percent at the beginning of this decade, compared with 6.5 percent in the first decade of the century. The differences are less for net immigration than for gross immigration alone because of the much higher levels of emigration (both in relative and absolute terms) early in the twentieth century. […]
Assuming a continuation of current trends through the end of the decade, the U.S. population will grow by 22.1 million. Net immigration will be 8.2 million, or 37 percent of the population change for the 1990s. Even though immigration is now at a much lower rate than it was at the turn of the century, it plays a greater role in population growth than it did then—37 percent compared with 28 percent for the 1900 to 1910 decade. The reason lies with the other contributor of population growth—the number of births to the resident population, which has dropped with the decline in overall fertility rates.”

44 – 45 “Immigrants with family ties to U.S. citizens account not only for the majority of current immigrants, but also for the vast majority of those who are on waiting lists for visas.”

45 “Waits for visas are particularly long for applicants from the Philippines, Mexico, and India. For example, in December 1996 immigrant visas for brothers and sisters of U.S. citizens from the Philippines were issued to those whose U.S. relative had petitioned for their immigration in November 1977 (Bureau of Consular Affairs). Given the growth in the number of registrants in this category since 1977, recent applicants can expect an even longer wait if current immigration provisions are maintained.”

51 “Most illegal immigrants reside in only a few states, with about 40 percent living in California.”

52 “Employer sanctions have proved difficult to enforce because of the increased use of fraudulent documents and the limited resources of the federal government. At the same time, there has been little success in developing a fraud-proof system that employers could easily use to verify the legal status of job applicants.” !!

52 “Although many persons actually enter the United States illegally and about 1.5 million persons are apprehended each year as illegal immigrants, these numbers are misleading for policy discussion. First, many of those apprehended are arrested more than once, and INS data thus involve double- or triple-counting of people. Second, and just as important, many persons who enter as illegal immigrants subsequently return to their home country.”

52 “Before the enactment of IRCA in 1986, it was estimated, 3 to 5 million illegal immigrants lived in the United States. As a result of IRCA’s legalization program, more than 3 million persons sought legalization and, at last count, about 2.7 million have become legal residents. The 1986 legalization reduced substantially the size of the illegal immigrant population. But by 1996, the flow of new illegal entrants had brought the number to an estimated 5 million”

52 – 53 “In earlier periods of immigration to the United States, immigrants were predominantly
male. […] Among immigrants
in their late twenties, the ratio of men to women was greater than 3 to 1
(Carter and Sutch, 1996). This tilt toward men should not be surprising; in virtually
all contexts, men have been historically more migratory than women, especially
when economic betterment was the primary motive for moving. As U.S.
immigration policy changed and family reunification became a more dominant
reason to come to the United States, the gender balance shifted. Since the 1930s,
cohorts of immigrants—the successive groups of immigrants who arrive in a given
period of time—have been more equally split between men and women (Carter
and Sutch, 1996). In 1995, for example, women accounted for slightly over half
of all legal immigrants—54 percent.”

56 “(1995) immigrants are more
likely to be married and are less likely to be divorced, widowed, or separated.
The differences between the native-born and all foreign-born residents are
smaller, but the same general pattern holds. The image of immigration in this
country is not one of lone, young men with little attachment to place, family, or
country. Instead, it is couples who have married and are starting families. These
higher marriage rates are not surprising, since family reunification receives such
high priority in our system. In choosing between a woman married to a greencard
holder and an unattached single woman, the current policy selects the married
women.”

59 NOTE 28 “The regional concentration of current immigrants seems to be similar to that at the turn of the
century, with slightly more than three-fourths of immigrants going to the top 10 destination states.
The current state destinations for immigrants differ from 1900, however: California was not a top 10
state for immigrants in 1900, but it now receives the largest number of new entrants.
We lack up-to-date information on the dispersion of immigrants and their offspring because the
1980 and 1990 censuses did not collect information on the nativity of parents. Previous census
analysis (Lieberson and Waters, 1988) on ancestry reveals that European ethnic groups continued to
be regionally concentrated. The residential concentration is often modest, however, within metropolitan
areas. There are few American cities with large, concentrated European immigrant settlements so
characteristic of the turn of the century.”

62 “The uniqueness of the United States is not in how many immigrants it has relative to its population, but in its position as the only large country that is attracting significant numbers of immigrants.” !!

65 “Canada and the United States receive immigrants from a large number of countries. Less than one-fourth of immigrants into these two countries are from the top three sources.”

3 – The Face of the U.S. Population in 2050

87 “The [fertility rate] for the third and later Hispanic generations is 2.04, higher than that for the white and Asian groups but substantially lower than the current observation for the overall Hispanic population (2.63).”

92 “92 percent of births to a white mother have a white father; 90 percent of births to a black mother have a black father; the ratio is 66 percent for Asian mothers, and for Hispanic mothers it is 68 percent.”

92 NOTE 17 “In the 1990 census, Hispanics would be reported as a member of any racial group, including the
reporting of “other” race. Both foreign-born and native-born Hispanics reported themselves in large
numbers in the white and other racial categories. About 40 percent of Hispanic respondents reported
themselves as “other” in the 1990 census; most of the rest reported themselves as white. Overall,
more than 97 percent of people reporting themselves in the “other” category were of Hispanic origin.
Such census reporting complicates the analysis of racial and ethnic attribution because respondents
could report both a racial as well as a Hispanic identity. This may overstate the preference for Hispanic
identity and, conversely, understate their preference for other identities. If persons of multiple
ancestry, including Hispanics, were asked to report only one primary ethnic identification, like other
respondents, this might decrease the number in the Hispanic category and increase the number in the
white category.”

103 – 104 “The number of school-age children will expand rapidly. Under current immigration policy, the K-8 enrollment will increase to 53.7 million in 2050, compared with 36.8 million in 1995 (an increase of about 17 million). The school-age population in 2050 will be 6.4 million lower if immigration flows are cut in half and 3.9 million greater if they are increased by 50 percent.
Similarly, high school enrollments for grades 9 to 12 were 14.0 million in 1995. These enrollments would increase to 20.3 million under medium net immigration—with a range of about 2.5 million more or less under low and high immigration assumptions.
In light of the geographic concentration of immigrants, it is important to remember that not all school districts will be affected equally by immigration. In fact, most school districts in this country will feel no consequences, no matter what happens with immigration. Other districts, especially those in the urban areas of the large immigration states, will be keenly sensitive to any changes in immigration policy.”

105 “enrollments for U.S. colleges will grow about one-third by the middle of the next century.”

106 “Although the impact of immigration on the size of the elderly population is not trivial, it certainly plays only a supporting role. No immigration policy, no matter how restrictive, can reverse the underlying trend. The big news, therefore, over the next half-century is the guaranteed substantial growth in the number of people past age 65—the size of that population is likely to double. […]
Under the medium net immigration assumption, the oldest-old age group [(those over 85)] will increase from 3.6 million in 1995 to 17.7 million in 2050 (a fourfold increase). Assuming the low and high net immigration levels provides a range for this age group of 17.4 to 18.1 million. Although the oldest-old population will expand greatly during the next half-century, immigration will have little effect on its size.”