The U.S. Economy Will Grow an Extra $7 Trillion Over the Next Decade Due to Immigration, CBO Says

By: Ben Campbell | Published: Feb 21, 2024

A predicted surge in immigrants arriving in the U.S. over the next decade will increase the nation’s GDP by over $7 trillion.

The figure comes as part of a recent report released by the Congressional Budget Office.

United States Set for Immigration Influx

Immigration has become a sensitive topic of conversation in recent years across the United States.

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Regardless of stance, “The Budget And Economic Outlook: 2024 to 2034” estimates immigration will bring in an extra $7 trillion to the economy by the year 2034.

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Economists Predictions in Line with CBO Findings

Economists have surmised that the recent influx of immigrants arriving in the U.S. over the past few years helped reduce the possibility of a full-blown recession (via Business Insider).

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Both the CBO and economists agree that a higher number of U.S. immigrants also helps to reduce wage inflation.

CBO Director Shares Opinion

Speaking on the recent CBO report, the director of the Congressional Budget Office, Phillip Swagel, says immigrants will help increase the overall tax revenue brought in by the nation.

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“The labor force in 2033 is larger by 5.2 million people, mostly because of higher net immigration,” he said, via Business Insider. “More workers mean more output, and that, in turn, leads to additional tax revenue.”

Major Increase in Revenue

Swagel went on to explain that the increase in immigrants will help increase the United States’ overall GDP over the next decade.

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“As a result of those changes in the labor force, we estimate that from 2023 to 2034, GDP will be greater by about $7 trillion, and revenues will be greater by about $1 trillion than they would have been otherwise,” he said.

Immigration Will Continue to Increase

In the CBO report, they release figures that suggest the overall net immigration has seen a steady increase since 2022.

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Predictions by the CBO suggest immigration will continue to remain elevated well into 2026.

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Working-Age Immigrants

A portion of the CBO report reveals that most immigrants currently traveling to the states are between 25 and 54, which is considered the prime working age.

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This is important as it will ensure the U.S. economy isn’t negatively affected by an aging population, like the current situation unfolding in Japan.

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Higher Demand for New Homes

Continued demand for new homes is another aspect of a major influx of immigrants over the next decade.

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“Because immigrants tend to live with family or friends initially and form their own households gradually, high rates of immigration from 2022 to 2026 will continue to stimulate construction of new homes during the second half of the 2020s,” the CBO wrote in its report.

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Immigrants Provide a Net Positive Effect

Speaking on an episode of “60 Minutes,” Fed Chairman Jerome Powell shared his thoughts on increased immigration.

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When all things are considered, “the U.S. economy has benefited from immigration.” said Powell (via Business Insider).

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Hardworking Immigrants

As Powell continued, he said that immigrants tend to work harder in some cases than non-immigrants.

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“Immigrants come in and they tend to work at a rate that is at or above that for non-immigrants. Immigrants who come to the country tend to be in the workforce at a slightly higher level than Americans do,” Powell said.

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Skilled Labor

While political parties in the states have a strong difference in opinion when it comes to immigration policies, it’s clear more skilled laborers are needed across the nation.

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Speaking with Business Insider, David Kelly, chief global strategist at JPMorgan Asset Management, said, “If we increased the number of people who were allowed to immigrate into the United States based on the skills they bring to the marketplace, we could fix this huge excess demand for labor problem pretty quickly.”

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Immigrants Help Fill Holes in the Labor Market

During an interview with Business Insider, Cory Stale, an Indeed economist, spoke about immigrants filling holes in the labor market.

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“Seeing the numbers from the Census Bureau are really, really encouraging,” he said. “We are in a pretty tight labor market right now, and immigration can play a really important role in filling a lot of those positions and providing additional labor to employers.”

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