Immigration and the U.S. Economy

How immigrants contribute to U.S. growth, innovation and labour supply, what research shows about wages, and why immigration is so contested.

The United States has more immigrants than any other country. Immigrants make up around one in seven U.S. residents and a larger share of the workforce. Their role in the economy is one of the most debated issues in American politics.

Contributions

Labour supply: immigrants fill jobs in agriculture, construction, health care, hospitality and technology. As the U.S. population ages, immigration adds working-age people.
Innovation: immigrants are highly represented among scientists, engineers and inventors. Studies have found that immigrants, or their children, founded a large share of major U.S. companies, and immigrants have won a large share of American Nobel prizes in science.
Entrepreneurship: immigrants start businesses at higher rates than native-born Americans.

Skilled visas

The H-1B visa allows U.S. employers to hire skilled foreign workers, especially in technology. Indians receive the largest share of H-1B visas by far. The number of new visas is capped each year, and demand far exceeds supply, so visas are allocated by lottery. In 2025, the U.S. government announced a large new fee on new H-1B petitions, raising concerns among employers and Indian workers.

Effects on wages

Research generally finds that immigration has small effects on the average wages of native-born workers, and may raise wages for some by complementing their skills. Effects may be more negative for workers who compete most directly with new immigrants, such as earlier immigrants or workers without high school diplomas, though estimates differ.

Fiscal effects

A major 2016 report by the U.S. National Academies of Sciences found that first-generation immigrants cost governments somewhat more than they pay in some estimates, largely because of the cost of educating their children, while the second generation are among the strongest fiscal contributors.

The debate

Debates focus on border control, undocumented immigration, which involves around 11 million or more people, levels of legal immigration and the balance between skilled and family-based immigration.

An Indian engineer's path

An engineer from Hyderabad completes a master's degree in the United States, then works on an H-1B visa at a technology company. She applies for permanent residence, but because of per-country limits, Indians can face very long waits for green cards. Her skills benefit the company and the economy, yet her long-term status remains uncertain for years.

Thinking immigrants take a fixed number of jobs

The number of jobs in an economy is not fixed. Immigrants also spend money, start businesses and complement native workers, creating demand for more jobs. This is the lump of labour fallacy applied to immigration.

Key takeaways

Immigrants are around one in seven U.S. residents and contribute strongly to innovation and entrepreneurship.
Indians receive the largest share of H-1B skilled visas, which are allocated by lottery.
Research finds small average effects on native wages, with debate about specific groups.
Second-generation immigrants are strong fiscal contributors.