Socio-Economic Effects Of Immigration On The Economy

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The United States is known as the country who has the largest immigrant population in the world. Since 2000, the number of legal immigrants who have entered the United States equals about one million. Further, it is estimated that about 700,000 illegal immigrants enter the US each year. This high rate of immigration, whether legal or illegal, impacts the overall economy. The varying impacts of immigration have caused many debates in the United States, even more so after the last election. Native-born Americans claim that immigration decreases wages and makes it harder for workers to find jobs, but many economists prove this theory to be false. This paper explores the positive and negative impacts of immigration, along with the effects of the…show more content…
This evidence can be used to characterize the positive and negative impacts of immigration on the economy. In the short run, immigrants lower the wage rate in certain jobs, but raise the returns to capital because companies spend less to hire workers. This leads to an increase in profitability of firms which will eventually “attract capital flows into the marketplace, as old firms expand and new firms open up shop to take advantage of the lower rate” (Borjas 164). As a result, the demand for labor increases, and the extent of the curve shift depends on technology. In the long-run, the increase in supply of labor leads to an increase in the firms’ demand function because capital expands as firms take advantage of the cheaper work force. This causes the wages in the labor market to return back to the initial…show more content…
First of all, it is seen that states with large concentrations of less-educated immigrants may face larger tax burdens. This can be explained by the statistics that show how immigrants pay less in taxes, and are more likely to send their children to public schools. There were studies to contradict this, however, which showed how many immigrants pay more in taxes over a lifetime than they consume in government services. Moreover, another consequence of immigration is the reduction in wages. However, this is only an issue for American citizens without a high school diploma. This decrease in wages can be attributed to the fact that the supply of immigrants in lower paying jobs increases. Problems also arise from the large number of illegal immigrants that enter the country. The Heritage Foundation addresses this issue in their article about the problems of immigration. They explain that “when three out of every 100 people in America are undocumented, there is a profound security problem. Even though they pose no direct security threat, the presence of millions of undocumented migrants distorts the law, distracts resources, and effectively creates a cover for terrorists and criminals” (Johnson and Kane). This inefficiency is later dismissed, however, when the authors claim that “the population today includes a far higher percentage of foreign-born Americans than in recent
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