New Report: The Fiscal Impact of Immigrants and Skills-Based Immigration

Rebalancing immigration toward skill and youth could stabilize U.S. debt and boost growth 

NEW YORK, NY – Discussions about U.S. immigration reform often focus on whether to restrict or expand immigration. In a new Manhattan Institute report, fellow Daniel Di Martino reframes the debate and proposes a better question: who, rather than how many, should the U.S. admit through its immigration system? Di Martino finds that prioritizing certain attributes such as age and education can create a significant positive effect on the U.S. economy and fiscal outlook.

Updating previous Manhattan Institute research, Di Martino applies a Congressional Budget Office–style methodology to estimate the 10- and 30-year impacts of dozens of immigration policies and categories of immigrants on tax revenues, federal spending, GDP, and population. He finds that younger, highly educated immigrants, particularly those with bachelor’s or advanced degrees, generate large net fiscal surpluses and expand the economy, while low-skilled immigrants tend to receive more in benefits than they contribute in taxes. Employment-based and high-skilled visa holders are strong fiscal positives, whereas extended-family and unauthorized immigrants impose long-term economic costs.

Di Martino’s research allows policymakers to estimate the economic impact of nearly any immigration reform. He proposes a skills-based system that prioritizes younger immigrants with higher education, who speak English and earn higher incomes, to maximize economic growth, fiscal responsibility, and assimilation. His modeling shows that rebalancing immigration policy toward these entrants could raise GDP by 4.6% and reduce federal debt by nearly $20 trillion over 30 years, stabilizing debt without cutting spending or raising taxes on Americans. Ultimately, Di Martino emphasizes that fiscal outcomes should not be the only factor guiding immigration policy but argues they are a crucial and quantifiable measure of long-term national interest. 

Click here to read the full report.