By Ernesto Castañeda, Edgar Aguilar, and Natalie Turkington

March 12, 2024

A new report from CLALS and the Immigration Lab finds that recent immigrants are a key driver of economic growth in the United States.

The report presents an original calculation that finds that only in 2022:

• Immigrants who sent money home contributed over $2.2 trillion dollars to the U.S. economy.
• This contribution by migrant labor constitutes about 8% of the U.S. GDP.
• Remittances represent just 4% of the total output generated by immigrants, even if they add up to $81.6 billion annually, disputing the narrative that immigrants drain the U.S. economy.

Immigrants who remit contribute around $2.2 trillion annually to the U.S. economy. Despite concerns that remittances drain U.S. dollars, they only represent 4% of immigrants’ total contributions. This estimate is based on credible sources indicating that 17.5% of immigrants’ income is sent as remittances and considering a combined yearly salary of approximately $466.5 billion.  Using data from the World Bank, the Association for Central Banks of Latin America, the U.S. Census Bureau, and the Bureau of Labor Statistics, however, this is just a good approximation to quantify some of the benefits of migration. Immigrants’ contributions to the economy are greater as not all send remittances through formal channels. Additionally, it overlooks the economic growth immigrants stimulate by spending their wages in the U.S., creating demand, and generating jobs. Not to say anything about the human, cultural, culinary, and creative contributions. Below are more details about this novel estimation and projections of future contributions by immigrants to the U.S. economy.

The Congressional Budget Office’s Demographic Outlook 2024-2054, which has gotten some deserved media attention, estimates that in 2034 the U.S. economic output will be $7 trillion larger due to new immigration. Tax revenues would also be higher and the deficit lower because of immigration all else equal.

The quote from the CBO Director’s press release is, “in our projections, the deficit is also smaller than it was last year because economic output is greater, partly as a result of more people working. The labor force in 2033 is larger by 5.2 million people, mostly because of higher net immigration. As a result of those changes in the labor force, we estimate that, from 2023 to 2034, GDP will be greater by about $7 trillion and revenues will be greater by about $1 trillion than they would have been otherwise.”

We estimate immigrants’ contribution to the U.S. economy between 2023 and 2034 will be greater. Using the same immigration estimates as the Congressional Budget Office’s (see graph below), we calculate new immigrants have the potential to elevate the U.S. economic output by a staggering $17 trillion just in 2034.

Source: Congressional Budget Office interactive graph here.

However, if the number of new immigrants and asylum seekers continues at the same pace as in estimated for 2024, 3.3 million per year (10,000 per day as happened in December of 2023), we calculate that the U.S. would enjoy an increased economic output of over $37 trillion just in 2034.

As the Economic Policy Institute writes, “The unemployment rate for U.S.-born workers averaged 3.6% in 2023, the lowest rate on record. Obviously, immigration is not causing high unemployment among U.S.-born workers.” They further write, “immigrants that make up 18.6% of the U.S. labor force are playing key roles in numerous industries and are employed in a mix of lower, middle, and higher-wage jobs. And as the Congressional Budget Office recently reported, immigration is contributing to strong economic growth—with future immigration forecasted to boost real gross domestic product by 2% over the next 10 years—as well as increasing government revenue. Immigrants are also complementing U.S.-born workers by contributing to overall population and workforce growth. The U.S. Census Bureau projects that if the U.S. were to have lower-than-expected immigration levels, the population would begin to decline in 20 years, and if there were suddenly zero immigration, the population would begin to decline next year, deeply harming economic growth.”

A Washington Post article states that around 50% of the growth in the labor market in 2023 was due to foreign-born workers. The same was the case in the 1990s.

In 2021, 45 million immigrants lived in the United States, accounting for 14% of the country’s population. Immigrants are integrated into American social, economic, cultural, and political life. The Immigrant Research Initiative calculates that “Immigrants account for 17 percent of the U.S. economic output (GDP), even higher than their share of the population. The United States has a $19.6 trillion economy according to the Bureau of Economic Analysis 2021 statistics, which means immigrants are conservatively responsible for $3.3 trillion of economic output.” This supports our calculation of around 2.2 trillion only from immigrants who send money abroad because many do not send remittances.

Estimates and projections vary, but what is clear is that there would be no economic growth without recent immigrant arrivals. If immigration (of all types) decreases in the following years, economic growth will most likely plummet, and inflation will rise. Furthermore, this does not only apply to the United States but to other countries as well.

You can find coverage of the report in Spanish here:

“Immigracion y Economia en EE.UU.” RTVE 24h.

“Los hispanos y el mercado laboral en EE. UU.” Y Esto No es Todo podcast on YouTube.

“Ernesto Castañeda y el mercado laboral en EE.UU.” RTVE audio.

Ernesto Castañeda is the Director of the Center for Latin American and Latino Studies and the Immigration Lab.

Edgar Aguilar and Natalie Turkington are research assistants at the Center for Latin American and Latino Studies.

Full report here.