The Imperative of Immigration: Sustaining Economic Growth Amidst Declining Birth Rates in the United States
(Image Source: Ellis Island Foundation)
By Sofia Orman
Since its establishment, the United States has consistently relied on population growth in order to develop and maintain its booming economy. The pattern is simple: as the American population grows, the workforce expands and the production of goods increases, resulting in a strengthened economic system. Although this process has been highly efficient—especially after World War II, when the term “baby boom” first arose—it is no longer viable, as the US birth rate has been rapidly declining in recent years, with deaths forecasted to outpace births by the late 2030s.
The diminishing domestic-born population can be attributed to a number of factors, all of which are linked to societal shifts that began in the latter half of the 20th century. Firstly, as women gained more opportunities in the workforce and became financially independent, they often chose to forego having children in pursuit of their professional goals instead. Women were also better able to control their fertility than in decades past, following the nationwide push for reproductive rights that culminated in Roe v. Wade. Birth control and abortions prevented a large number of unplanned pregnancies, reducing the US birth rate drastically. Of similar importance are the drastic decrease in married couples and the increase in “dual income, no kids” (DINK) relationships. According to two separate reports, in 2021, there were around 1.99 million marriages in the United States, as opposed to 2.5 million in 1984. A decrease this large in a short thirty-seven-year period directly correlates to the recent decline in the US birth rate, as supported by the graph below where the yellow line represents married women and the purple line represents unmarried women in the United States
Currently, married women are three times more likely to have a child in a given year than non-married women. Simultaneously, DINK relationships are facing a steady rise: as of 2021, about 15% of American households were considered DINKs. That said, it has become increasingly evident that reductions in birth rates are the direct product of improvements to the general quality of life for Americans. Although declining birth rates can be seen as a sign of economic development, population growth is also necessary to sustain the expansion of the US economy. Thus, the nation must depend on alternative methods of population growth beyond fertility. Although this statement seems quite contradictory, a solution does already exist.
Here enters immigration.
Immigration, the same practice that the US has relied on for centuries, plays a pivotal role in compensating for the decline in the domestic-born American population, thereby sustaining the nation's economic vitality. Immigrants contribute significantly to workforce growth: they fill critical labor shortages across various sectors and spend their income “in a cycle that drives supply, demand, and growth.” Between 2021 and 2022, the increase in immigrants in the United States accounted for 65% of the total US population increase.
Immigrants comprise an increasingly large percentage of the US population: approximately 26.7% of California’s population and 21% of Florida’s. This is particularly interesting because California and Florida are two of the most prosperous states, Florida specifically being home to “4 of the nation’s top 5 fastest-growing metropolitan statistical areas.” In other words, immigrants happen to be located in the regions that are economically booming, and this is surely not a coincidence.
To bring this same notion to light, journalist German Lopez constructed a graph based on census data. The census projections “examine immigration’s impact on future national growth by assuming four scenarios over the 2022-2100 period based on different annual levels of net immigration.” Here the x-axis represents the evolution of time, while the y-axis represents the US population in millions.
The depicted “Zero immigration” scenario is incredibly unrealistic: the US has always had some influx of migrants, even if it has been illegal entry, and there has been no discussion around banning legal immigration either. Still, the “zero” projection effectively demonstrates immigration's role in population growth: if the US bans immigrants from crossing their border, US population growth would flat-line by this year.
Despite the evident economic benefits that arise from immigration, there exists a prevalent viewpoint among Americans favoring lower levels of immigration. This sentiment is fueled by concerns over job competition, cultural assimilation, and strain on public resources, because many Americans are ignorant of the benefits brought to the US by immigrant families. Although this prejudiced notion has decreased among Americans in recent years, a poll taken in 2021 by the libertarian think tank CATO Institute shows that 53% of Americans oppose allowing immigrants to receive government financial assistance and 9% of Americans want to shut down the border.
Even if Americans aren’t arguing in favor of closing the border completely, 68% of Americans prefer a low level of immigration, as opposed to 23% who prefer a high level of immigration.
But again, immigration has benefits. Unless Americans want to have more children, which is highly unlikely, we need to accept immigration as a solution to our rapidly declining birth rate. Immigrants serve an indispensable role in driving economic growth across the United States, and have “buoyed the populations of a number of major central cities…and in some cases generated population growth in once declining, distressed cities.”
Immigration also has long-term effects on the US economy. Research shows that although immigrants lacking high-value skills and education generally provide a small net benefit to the economy, their kids tend to be more successful than Americans born in non-immigrant households because immigrants are much more mobile and willing to capitalize on opportunities than domestic-born Americans. Ran Abramitzky, a professor of economics at Stanford University, states that “children of immigrants from nearly every sending country are more upwardly mobile than the children of the US-born and that stays constant over 100 years, regardless of the sending country.” Immigrant children are also projected to fill the gaps that will arise in the workforce during the upcoming Baby Boomer retirement period. According to a report published by the Center for American Progress, 12.9 million children of immigrants will enter the workforce by 2030, tripling their share in the workforce from 6% in the 1990s to approximately 18% by the end of the decade.
Without immigration, the US would face the risk of economic stagnation, much like what the Balkans are now facing. The region is entering a period of critical demographic decline, as young people are fleeing, fertility rates are falling, and societies are aging. As the population plummets in recent years, workforce participation rates in the Western Balkans continue to fall behind other countries with similar levels of economic development. The following diagram illustrates the projected population change in central Europe & the Balkans by the year 2050. The negative percentage values correspond to a projected decrease in population, while the positive values correspond to a projected increase.
Although this significant population decline is widespread, there are some exceptions. For example, why is Austria projected to grow by 16%, while its neighbor Hungary declines by 20%? The obvious answer is that Austria has a lenient immigration policy, while Hungarian Prime Minister Viktor Orbán operates under a rhetoric of xenophobia and anti-immigration. As a result, Austria’s economy has prospered, while Hungary’s has stagnated. Of course, there are other reasons for this outcome, but immigration is undoubtedly a primary contributor.
While anti-immigrant countries endure economic consequences as a result of their xenophobic policies, those that welcome newcomers tend to flourish. For this reason, the future of the US economy is much brighter than that of Central/Southeastern Europe. By promoting immigration, the US is enhancing its workforce, innovation, and productivity, and it is almost guaranteeing upward mobility.
Changing demographic trends mean that not all developed countries in the world face the same economic future—forecasts are typically not optimistic for regions with a plummeting population. However, the United States is in a unique position because of its popularity amongst immigrants. Immigration allows the United States to flourish to the extent that it does, meaning that it is our responsibility to ensure the livelihood of immigrant families and ultimately expand the already mighty US economy.
Sofia Orman is a first-year student at NYU Stern studying business, with a keen interest in sociology and public policy. As a second-generation immigrant from the former Soviet Union, she is deeply interested in the relationship between immigrants and domestic-born citizens, especially here in the United States.
