Immigration’s Crucial Role in America’s Economic Future

After celebrating another Independence Day filled with parades, flags, and speeches, a pressing question arises: Does the nation still believe in one of its founding principles – welcoming those who seek a better life? This belief shapes not only America’s past but also its economic future.

Recent restrictions on immigration include fewer green cards issued, travel bans from certain countries, and reduced refugee and asylum grants. According to the U.S. Census Bureau, net international migration reached 2.7 million in 2024 but declined to 1.3 million in 2025, with projections showing a further decrease to 321,000 by 2026 – a historic drop.

Several concerns underlie these restrictions, notably the perceived negative fiscal impacts of immigration on state and local budgets. Growing populations indeed increase demands on public services. However, a study I coauthored shows that the idea of immigrants as a mere drain on state economies lacks evidence.

This study examined data from each U.S. state between 2008 and 2023. It found that a 1 percent increase in a state’s population due to immigration correlates with a 1.5 percent rise in private sector GDP – a greater increase in income compared to population growth. The effects vary widely by state. For instance, West Virginia and Montana showed increases of 2.97 percent and 4.04 percent, respectively.

The study also found that states with high economic freedom, like New Hampshire and South Dakota, benefit significantly from immigration. These findings carry important implications for the U.S. economy. The Congressional Budget Office reports that U.S. population growth is expected to slow, dropping from 0.3 percent annually over the next decade to 0.1 percent by 2056. Declining fertility rates mean that net migration becomes crucial; without it, the population may decrease starting in 2030.

The aging U.S. population exacerbates these concerns. The CBO projects that the ratio of people aged 25 to 64 to those over 65 will fall from 2.7 now to 2.2 over the next thirty years, indicating fewer working-age individuals, reduced innovation, and lower contributions to essential programs like Social Security.

For states, though immigration laws are federal, states can benefit from national reform. Particularly, rural states and those with less governmental burden could gain most from these changes. Paradoxically, states most concerned about immigration often face challenges like population loss and workforce shortages – making them prime beneficiaries of immigrants.

States can actively implement policies to maximize immigration benefits by lowering taxes, reducing government size, and easing regulations. Facilitating pathways for newcomers to work and contribute quickly can help bolster state economies.

The United States prides itself on its immigrant heritage, embodied by the Statue of Liberty’s call to welcome those “yearning to breathe free.” A Gallup poll shows a record-high 79 percent of Americans view immigration as beneficial.

For those who worry that immigration might drain resources, the study provides reassurance. Immigration not only allows individuals to pursue the American Dream but also brings benefits to all citizens. In many states, especially those wanting growth, newcomers are not merely a cost – they are integral to building the future economy.