Originally published at Project-Syndicate | Jan 10th, 2025
Today’s rich countries owe much of their success to the contributions of migrant workers. Yet rising anti-immigrant sentiment threatens to restrict migration, jeopardizing host countries that depend on foreign labor and developing economies that rely on remittances to drive economic development.
OXFORD – The brouhaha between the tech bros led by Elon Musk and Donald Trump’s nativist supporters over whether to restrict skilled immigrants reflects a deep underlying tension between the politics and economics of migration. While Trump’s “MAGA” base sees migrants as a threat to their jobs, company bosses recognize that there is an increasingly fierce global competition for talent and to “make America great again” they need more foreigners. In fact, over 60% of the trillion-dollar tech company CEOs in the United States are foreign born, including Musk.
Today’s rich economies owe much of their success to migrants who – by choice or through coercion – labored on their plantations, factories, mines, and homes. Even now, these countries continue to rely on low- and high-skilled migrant workers to fuel economic growth and dynamism by taking on jobs that native-born workers are unwilling or unable to fill.
Far from displacing local workers, migration tends to boost employment among native-born citizens. Studies have consistently shown that countries with significant foreign-born populations experience faster and more sustained GDP growth. In the US, migrants paid an estimated $579 billion in federal, state, and local taxes in 2022, and in the United Kingdom, official forecasts project that a 350,000 increase in net migration will “deliver a net reduction in borrowing of around £7.4 billion” ($9.1 billion) by 2028. While impressive, these numbers still significantly underestimate migration’s economic impact, overlooking its longer-term contributions to growth and dynamism.
Research also shows that migration does not negatively affect local workers’ wages. George Borjas, an economics professor at Harvard and once a prominent immigration skeptic, has acknowledged that while the impact of immigration on locals’ wages “fluctuates widely from study to study,” it seems to “cluster around zero.” Since lower-skilled migrants often take undesirable jobs, such as those involving long night shifts, zero-hours contract work, and heavy labor, their main competitors are usually other migrants.
None of this seems to matter to Trump, whose unsubstantiated claims include the charge that immigrants are taking “Black jobs.” In reality, despite a sharp rise in migration in recent years, unemployment among Black Americans remains at historic lows. And that is true more broadly. Rather than competing with native-born Americans, migrants have contributed significantly to US job creation. Over the past two decades, immigration has increased the wages of non-college-educated Americans while having no significant impact on college-educated workers. It has also boosted the female workforce participation rate, partly by making childcare and housekeeping more affordable.
Simply put, many countries depend so heavily on migrants that their economies would collapse without them. This is especially true in some Gulf countries; migrants make up roughly 90% of the labor force in the United Arab Emirates and Qatar. Elsewhere, foreign workers often fill critical labor gaps, doing jobs that require specialized skills, such as programming, plumbing, or surgery, while lower-skilled migrants handle vital tasks that locals are unwilling to perform like fruit picking and elder care.
Thriving economies naturally attract more migrants, who, in turn, boost productivity and fuel economic growth. This virtuous cycle explains why cities with the highest migrant concentrations are among the world’s most vibrant and prosperous. While migrants may arrive in countries with stagnant job markets, they rarely settle permanently. For example, migrants arriving in Greece often move on to Germany and northern Europe, much like South American migrants pass through Mexico on their way to the US.
A Fiscal Imperative
Anti-immigration politicians often portray migrants as a burden on public budgets. In fact, foreign workers tend to contribute more in taxes than they receive in benefits. This is largely because a substantial share of migrants are younger, work longer hours than native populations, and rely less on government services like education, pensions, health care, and elder care. Studies of the UK’s foreign-born population have found that migrants contribute more to government revenue than they consume in public resources. Similarly, migrants in the US, Germany, Greece, Portugal, and Spain are generally less dependent on social services than native-born citizens.
Even undocumented migrant workers make significant contributions to government finances. In the US, they are more likely to be in paid employment than native workers or documented migrants. Afraid to reveal their status, they rarely access welfare benefits, resulting in a substantial net contribution to the public purse. An estimated $2.3 trillion has accumulated in “suspense files,” representing Social Security contributions from individuals unable to claim their benefits, most of whom are undocumented migrants. These unclaimed funds are eventually earmarked for other spending.
Given their economic significance, reducing migration will inevitably stifle GDP growth and result in massive job losses. In 2022 alone, migrants to the US spent about $1.6 trillion on goods and services, and the federal government projects that migrant workers will contribute $7 trillion to US GDP over the next decade.
Refugees, unlike economic migrants, can sometimes become a burden on social systems. But this is largely due to restrictive immigration policies in countries like the UK, where asylum seekers are prohibited from working and forced to rely on public services.
Increased migration also offers clear demographic advantages. Most advanced economies, as well as many developing countries, including China, now have birth rates below replacement levels, which, combined with rising life expectancy, have led to rapid population aging. By 2050, the number of people aged 60 and older worldwide is expected to double to more than two billion. Workers will be required to pay the taxes that sustain social systems and perform the growing range of jobs that cannot be automated or done remotely, like elder care, personal services, and hospitality.
But there appears to be little correlation between demographic realities and public attitudes. Countries with the world’s lowest fertility rates – such as Poland, Hungary, Japan, and South Korea – are among those most opposed to migration. Nevertheless, public attitudes toward migration can and do change as people grow more accustomed to foreigners in their midst and begin to recognize the necessity of migrant labor. Even as Trump threatens to carry out mass deportations and close the US-Mexico border, business and civic leaders in Midwestern states – including those Trump won during the presidential election – have been calling for more immigration.
That is not surprising. Faced with an aging population and a shrinking workforce, a diverse swath of the US economy – from farming and health care to retail and manufacturing – has been experiencing severe staff shortages. The Republican governors of Indiana and Utah have highlighted the consequences of the congressional stalemate on immigration, writing that it “hobbles both parties and, more seriously, endangers America’s long-term well-being.” It is worth noting that Rust Belt states, where migrants are crucial to revitalizing local economies and reversing population decline, would be hit particularly hard by stricter immigration policies.
Moreover, migration provides two key ingredients of a dynamic economy: a growing pool of highly educated workers and a diverse workforce that fosters innovation and entrepreneurship. In the US, for example, immigrants are 80% more likely than native-born citizens to start a business and, among people with advanced degrees, three times more likely to file patents. Half of all venture capital-backed firms in Silicon Valley have at least one immigrant founder, and more than 50% of US “unicorns” – startups valued at $1 billion or more that have yet to go public – were started by immigrants. And migrants are significantly overrepresented among Nobel laureates, National Academy of Sciences members, and Oscar-winning film directors. In the UK, migrants account for just 16% of the population but account for one-third of all Booker Prize-winning authors.
Rhetoric and Reality
To be sure, not all migrants are exceptional or even law-abiding. Even so, criminality rates among migrants are typically lower than those of native-born citizens. This can be partly attributed to the inherent challenges of migration, as people who decide to uproot their lives and move to another country tend to be more ambitious, creative, resourceful, and determined.
Trump’s own grandfather is a case in point. Friedrich Trump was himself a migrant who escaped poverty in his native Bavaria to become a successful businessman in the US. During the 1896-99 Klondike Gold Rush, Friedrich ran a restaurant and provided other services to the prospectors. After returning to Germany to marry, he was deported back to the US for evading conscription and began buying up land in Queens, laying the foundation for his descendants’ real-estate empire.
But if migration offers such clear benefits, why do so many people and politicians oppose it? The disconnect between economic reality and political discourse is reflected in surveys showing that people tend to overestimate the size of their countries’ migrant populations and in the anti-immigrant rhetoric of parties across the political spectrum. Politicians, often assisted by audience-hungry media, have learned that sensationalized images of foreigners “flooding” or “swamping” their countries attract those who confront job insecurity, limited access to public services, or unaffordable housing. Even immigrants and their descendants are not immune to the influence of such messaging.
Walls and fences have long been a favored tool of anti-immigration politicians. But while they serve as powerful symbols of sovereignty, physical barriers are often counterproductive. Instead of deterring migration, they tend to trap as many people within a country’s borders as they keep out, forcing the most desperate migrants to risk their lives trying to circumvent them.
Trump’s “big, beautiful wall” on the border with Mexico, for example, is merely the latest iteration of a decades-old idea. In the 1990s, President Bill Clinton ordered fences to be built to prevent migration to US border towns. His successor, George W. Bush, expanded this project, adding more fencing than any previous administration. Barack Obama added more than 100 miles to the border fence, and Trump, in turn, added just 47 miles but reinforced roughly 400 miles of existing barriers.
Recent US administrations have also sought increasingly sophisticated and costly surveillance technologies and enforcement capacity. By 2022, funding for US Customs and Border Protection and Immigration and Customs Enforcement (ICE) had ballooned to $22 billion. But despite the rise in arrests, the judicial system remains underfunded. Roughly 500 asylum cases were processed daily in 2023, leading to a rapidly growing backlog. While waiting for their cases to be heard, many applicants remain in the US, often getting lost in an opaque and labyrinthine system. Meanwhile, the ongoing fortification of the US-Mexico border has driven migrants toward increasingly perilous routes. In 2022, an estimated 686 people died or disappeared trying to cross the border, making it the most dangerous land border in the world.
A Shot in the Foot
Anti-immigrant rhetoric reached a fever pitch during the 2024 US presidential election. Just as he did during his 2016 campaign, Trump repeatedly vilified Latinos and other immigrants as criminals and pledged to restrict their entry while deporting 11-21 million people.
Among Trump’s many unverified claims was his bizarre assertion that Haitian migrants in Ohio (whom live there legally) were abducting and eating their neighbors’ pets. Despite lacking any evidence – and ignoring pleas by local authorities – Trump’s allies and supporters amplified these dangerous lies. Senator Ted Cruz, for example, shared a meme of kittens urging voters to turn out for Trump “so Haitian immigrants don’t eat us.”
There are currently more than 13 million undocumented workers in the US, many of whom have been in the country for decades. Deporting them en masse would undermine the economy, harming US-born workers in the process. Industries like construction, agriculture, and meat processing, where undocumented workers account for a significant share of the labor force, would be hit particularly hard. The result would be sharp increases in housing and food prices, as well as the costs of elder and infant care, hospitality, and other services.
Furthermore, implementing a mass deportation program would face enormous legal, logistical, and economic obstacles that would likely take years to overcome. According to the American Immigration Council, the direct costs alone could exceed $315 billion – a “highly conservative estimate.” The long-term damage to the economy would be far greater.
But US policies have long been shaped by the tension between the economic necessity of foreign labor and the political incentives to appear tough on immigration. In 1954, Operation Wetback – a derogatory term referring to Mexicans who swam across the Rio Grande into the US – deported 1.3 million undocumented migrants. The resulting labor shortages sparked an outcry from businesses, prompting the government to allow Mexican workers to enter the US legally.
Trump’s deportation plans – the latest iteration of this tension – would have disastrous consequences not just for the US economy but also for Mexico. The sudden influx of millions of workers, coupled with the costs of repatriating non-citizens, would place enormous strain on Mexican resources. This burden would be compounded by the loss of remittances, which amounted to more than $60 billion in 2023, nearly double foreign direct investment.
Central American and Caribbean countries would be hit even harder. In El Salvador, Haiti, Honduras, Nicaragua, and Jamaica, remittances account for more than 20% of the national income. These funds are primarily spent on essentials such as food and medicine, with the remainder invested in education and housing. Research suggests that for every 10% increase in the number of Mexican and Central American migrants working in the US, the share of people living in extreme poverty in their countries of origin declines by 9%.
Brain Drains and Gains
Much of the migration debate is focused on the impact of migrants on the countries that receive them, but, as the example of remittances suggests, the effects on the countries they leave are equally important – and not necessarily positive. While India, China, and the Philippines produce the largest number of educated migrants, regions like Sub-Saharan Africa, the Caribbean, and Central America lose a far higher proportion of their university graduates. Roughly 20% of Sub-Saharan degree-holders live abroad, and more than half of university graduates from a number of Caribbean and Central American countries leave their homes.
In more populous countries, like India, where emigrants make up a small fraction of the educated workforce, the impact of migration is relatively limited. By contrast, in Sub-Saharan Africa, where only 9.4% of the population is enrolled in tertiary education, the departure of skilled professionals can impede economic development, implying a strong case for destination countries to compensate the countries that educated them.
But the emigration of highly skilled workers can have unexpected positive effects. Many aspiring migrants pursue higher education to boost their chances of landing jobs abroad. The success of those who leave often motivates those who remain to invest in their own education, while remittances provide the resources needed for increased investment in education, health, and infrastructure. This can lead to reductions in poverty and increases the number of students and skilled workers – even as more graduates emigrate.
Likewise, as migrants gain skills and income, they often channel these resources back to their home countries, bringing both expertise and investments that foster economic development. Most notably, migrants collectively send home more than $1 trillion annually (the World Bank estimate of over $880 billion in 2024 does not include substantial flows through unrecorded informal channels). In many developing economies, remittances sent by migrants abroad exceed aid and investment combined. In Lebanon, they account for 28% of GDP, and between 32% and 48% of GDP in Tajikistan, Tonga, and Samoa. These funds have a transformative impact, supporting investments in education, health, housing, and productive assets such as seeds, tractors, and sewing machines. Consequently, communities with high migration rates are often better off economically than they would be otherwise.
For the migrants themselves, the reality is more complicated. While studies show that migrants tend to achieve at least some of their aspirations, many face abuse and danger even after they reach their destinations, enduring social and economic exclusion, xenophobia, loneliness, and violence.
Moreover, migrants often take on dangerous jobs that local workers avoid, such as shift work in slaughterhouses. During the COVID-19 pandemic, precarious working conditions led to disproportionately high death rates among migrant workers. Migrant women, in particular, are frequently employed as cleaners, cooks, and caregivers – isolated and insecure jobs often lacking basic protections.
Better Migration
The idea of open borders may seem politically suicidal nowadays, but they were largely the norm until the twentieth century. The European Union’s Schengen area, which allows free movement across member states, demonstrates how such systems can work effectively. Over the years, migration within the EU has proven highly responsive to economic conditions, with open borders enabling both repatriation and circular migration.
As with trade liberalization, the costs of migration are often immediate, visible, and concentrated in a small number of communities, while the benefits tend to be widely dispersed, less tangible, and slower to materialize. To unlock the full economic potential of migration, governments must take steps to alleviate the burdens faced by directly affected communities. This could include building more affordable housing in areas experiencing population growth or investing in public transportation and infrastructure to meet increased demand.
Supporting these communities is economically prudent as well. Nearly 20 years ago, the World Bank estimated that global GDP could grow by more than $356 billion within two decades if rich countries increased their workforce by just 3% through immigration.
The anti-immigration sentiment sweeping the US and many other countries contrasts with the growing recognition among economists that cross-border migration, when managed properly, can benefit host and source countries alike. So far, the economists have been ignored. Increasingly restrictive policies targeting migrants from developing economies have jeopardized an essential lifeline for those seeking to escape poverty, conflict, and destitution while damaging the economies that shut the door on them.
Crafting a more humane and open immigration system – one that maximizes opportunities while mitigating costs – remains one of the biggest challenges facing policymakers. One possible solution is to develop a clear policy framework that ensures safe passage for migrants, enforces minimum wage and workplace safety standards, and provides portable pensions and social security benefits to those returning to their home countries. At the same time, migrants would be required to obtain proper documentation, pay taxes, and adhere to their host countries’ laws.
But first, voters and political leaders must acknowledge that migration is – and always has been – a fact of life. Its history is one of profound loss and sorrow, but also of new opportunities and extraordinary progress. Time and again, migration has driven human advancement. With the right policies, it will continue to do so.
Ian Goldin: Is Professor of Globalization and Development at the University of Oxford and the author of The Shortest History of Migration (Old Street Publishing, 2024, The Experiment, 2025).
