The Impact of Immigrants in Recession and Economic Expansion

In a recent report, published by the Migration Policy Institute, author Giovanni Peri analyzes the impact of immigrants on the labor market during a recession. “The goal of this study is to identify and measure the impact of immigration on employment and income (GDP) in the United States.”

According to Peri, the results suggest that:
•In the long run, immigrants do not reduce native employment rates, but they do increase productivity and hence average income. This finding is consistent with the broad existing literature on the impact of immigration in the United States.
•In the short run, immigration may slightly reduce native employment and average income at first, because the economic adjustment process is not immediate. The long-run gains to productivity and income become significant after seven to ten years.

Moreover, the short-run impact of immigration depends on the state of the economy:
•When the economy is growing, new immigration creates job in sufficient numbers to leave native employment unharmed, even in the relatively short run and even for less-educated native workers.
•During downturns, however, the economy does not appear to respond as quickly. New immigrants are found to have a small negative impact on native employment in the short run (but not in the long run).

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