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"The Penn Wharton Budget Model estimates that doubling net legal immigration from 800,000 to 1.6 million people a year will increase the size of the U.S. population, employment and GDP," states the budget model website. "The red line in Figure 1 shows that if net legal immigration is increased by 50 percent, to 1.2 million a year, then by 2050 the U.S. will have about 13.7 million more people than if immigration policy stays the same, the blue line in Figure 1. Increasing net legal immigration by 50 percent will lead to about eight million more jobs in 2050."
(Penn Wharton Budget Model)
CLEVELAND, Ohio -- The United States, with an aging population, could benefit by substantially increasing the number of immigrants, especially those who are college educated, according to a new online analysis tool by the University of Pennsylvania.
If net legal immigration to the U.S. gradually doubled from the current 800,000 per year to 1.6 million over the next few decades, it would not only increase the size of the population, but also employment and the Gross Domestic Product, or GDP, according to the Penn Wharton Budget Model at budgetmodel.wharton.upenn.edu.
The budget model, or PWBM, also shows that the U.S. could benefit by shifting the educational mix of legal immigrants who are admitted into the country each year. It examines increasing the share of immigrants with college degrees to 55 percent from the current 35 percent.
Kent Smetters, a professor of business economics and public policy at The Wharton School of the University of Pennsylvania, led the 16-person PWBM team. He said that by increasing the number of educated immigrants, the U.S. would be following other industrialized nations, which primarily view immigration through an economic lens. The U.S. system takes economics into account, but has other goals, including unifying families.
"The Canadian system, for example, is much more focused on economics, using a point system dependent on various skills," he said. "The Canadian system skews toward people with a higher skill level.
"We find that simply changing the mix of immigrants to the U.S. doesn't have much impact on GDP growth and employment," Smetters said. "You have to increase the numbers."
The foreign born population in the U.S. is about 13 percent, according to Census data. In Ohio, it is about 4 percent. Cleveland, with a foreign born population of about 4.5 percent ranks 99th out of the top 100 cities based on the percentage of foreign-born residents. Toledo ranks 100. Cities in Florida, including Miami, and in California, including Santa Ana, dominated the top of the list.
In advance of the Republican National Convention in Cleveland next week, The Plain Dealer is taking a look at some issues that have played prominently during the presidential election. Immigration is one of them.
The PWBM reaches its conclusions about immigration based on analyzing more than a dozen data sources, including those from the Bureau of Labor Statistics, the U.S. Census Bureau, the Federal Reserve Board, the Internal Revenue Service and the Social Security Administration. The budget tool not only covers immigration, but other issues including Social Security and demographics. Using it, one may explore up to thousands of policy combinations for each issue.
"The PWBM's mission is to provide non-partisan, research-based analysis to inform the country's budget," states the budget model's website. "The nation needs an honest broker to help us better understand the tough choices the country must make to achieve important policy goals."
The budget model includes an examination of immigration focused on 2050. The gradual increase in immigration means that by then, the U.S. would admit 1.2 million immigrants per year, a 50 percent increase over the current number.
"(T)he U.S. will have about 13.7 million more people than if immigration policy stays the same," states the PWBM website. "Increasing net legal immigration by 50 percent will lead to about eight million more jobs in 2050."
An increase in population often spurs a jump in employment, as new jobs are created to meet the increased demand for goods and services. The budget model found that such a population increase, during about a 35 year period, would contribute to GDP growing at about 2 percent a year on average. If legal immigration didn't increase, GDP was projected to grow about 1.7 percent on average.
Because immigrants frequently are of working age, increasing immigration could have a positive impact on Social Security and Medicare by having more people paying into the system, PWBM found. It referred to something called the old-age dependency ratio, which compares the number of people of retirement age - those at least 65 -- to people of working age, or those 18 to 64.
"(I)ncreasing immigration would eventually reduce the old-age dependency ratio and improve the finances of old-age federal programs," the budget model states.
Some question the need for changing the immigration mix so that the majority of immigrants are college educated. Victor Narro, a project director at the UCLA Labor Center, who has been involved in immigrant rights and labor issues for 25 years, said the focus on uniting families is a good immigration policy. He said it has been a constant in U.S. immigration policy since the immigration act of 1965.
"It can't just be about valuing people for their work," he said of the focus on attracting educated immigrants. "It is also about how to bring families together and not separate families."
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