You might have heard that in 2019, immigrants comprised 13.7% of the total U.S. population. But what is immigration? Immigration is the international movement of people to a destination country of which they are not natives or where they do not possess citizenship in order to settle as permanent residents or naturalized citizens. The first recorded immigrant to enter U.S. was in 1892 when a 15-year-old girl Annie Moore came from Ireland to the states.
Many people try to understand as to what causes immigration or why people immigrate? There are numerous reasons for why people immigrate. They may be facing political, social, economical issues or they might be wanted a better standard of living. Immigration imposes both positive and negative externalities on economies.
To begin with, immigration can increase the share of total workforce in an economy. Not only it increases the working-age population but it also improves the GDP per capita. An increase in the workforce tends to increase the total output of the economy which is a positive sign. A report by world bank suggests that an increase of 1 point in the working age population can bring about 1-2 percentage point growth in the GDP per capita. Moreover immigrants bring in skills that can be really helpful for the economy. The skills and their output can increase the productivity of the economy as higher skills might ensure the fact that there could be more production of goods and services in the same time. Furthermore, immigration can give rise to the government revenue as well which can be a benefit for the people living under absolute poverty. The reason for the same is that immigrants as they will work and buy goods and services will have to pay taxes. Those extra amount of taxes can give boost to the government revenue which later can be used to pay for basic necessities for people who can’t afford them.
However immigration has a darker side too. As we all know that we all are facing the problem of scarcity where there are less resources to fulfil greater wants. Thus as there will be more people in a country due to immigration, it will put load on the resources and less would be left for the citizens which would mean that there would be greater allocation problems. Likewise, it would increase the supply of workforce in the economy which can be an issue as well. Due to a greater supply there would be less wages for that job which would mean that the workforce would be earning less. Additionally, it would be a disadvantage for the country from which people are shifting away. This would cause brain drain or the loss of skills which would cause their GRP per capita to fall. To sum it up, immigration is a topic that has significant and long-lasting consequences on the economy.