The Economic Impact of Immigration on the U.S. Economy

• Immigration serves as a critical driver of the U.S. economy, contributing significantly to labor force growth, fiscal stability, and innovation.
• Recent data suggests that reducing immigration and implementing mass deportations negatively impacts GDP, causes labor shortages, and increases consumer inflation.
• Contrary to popular perception, immigrants have significantly lower incarceration rates than native-born Americans.

Fiscal and Economic Contributions

• The Brookings Institution and Cato Institute report that from 1994 to 2023, immigrants generated a cumulative fiscal surplus of $14.5 trillion by paying more in taxes than they received in public benefits.
• As of 2023, immigrants generated roughly $1.7 trillion in economic activity and paid $652 billion in taxes.
• Undocumented immigrants alone contributed nearly $90 billion in tax revenue in 2023.
• The Congressional Budget Office (CBO) indicates that cutting off immigration slows economic growth and raises consumer prices.

Labor Market and Demographic Impact

• Immigration accounts for approximately half of annual labor force growth over the last three decades, playing a vital role in balancing the economic effects of an aging U.S. population.
• Net international migration dropped from 2.7 million in 2024 to 1.3 million in 2025, marking the first decline in the immigrant population in over 50 years.
• Studies show that restricting immigration does not benefit U.S.-born workers and instead threatens to contract the overall economy.

Entrepreneurship and Policy Hurdles

• Immigrants founded or co-founded 59% (455 of 775) of U.S. privately held startups valued at $1 billion or more.
• In March 2026, the U.S. Small-Business Agency (SBA) began prohibiting loans to firms not fully owned by U.S. citizens, a policy change impacting legal permanent residents who also pay federal taxes.

Crime Statistics

• Research by the Cato Institute shows incarceration rates for immigrants are much lower than for native-born citizens:
  • Native-born: 1,195 per 100,000 residents.
  • Undocumented immigrants: 674 per 100,000 residents (44% lower).
  • Legal immigrants: 303 per 100,000 residents (75% lower).