Economic Impact of Immigration


The issue of immigration remains to be a critical subject that many nations are fighting to address. In the recent past, immigration has increased significantly at alarming levels. For instance, according to the United Nations (UN) reports, the number of migrants globally has doubled over the past 20 years (“International Migration 2020 Highlights | United Nations”). The increasing number of migrants has been fueled by several reasons, including war and political instability in their countries. However, the search for employment opportunities remains the most cited reason for the rising immigration levels. Furthermore, immigration has been made easier due to the reduced cost of migrating and the opening of more immigration routes (“International Migration 2020 Highlights | United Nations”). The major positive impact of immigration involves improving the economy and prosperity of the recipient country.


The subject of immigration can be traced back to the early ancient civilizations. However, it became prominent during the 19th century when populations from various parts of Europe started migrating to the United States and North America due to the economic hardships that many European countries were experiencing. Between the 1850s and 1900, the largest human migration occurred when close to 17 million European immigrants entered the United States. This period was referred to as the Great Atlantic Migration and was significantly influenced by the economic prosperity that the United States was experiencing due to the industrial revolution. It is estimated that more than 37 million European immigrants entered the United States from 1820 to 1980. After the Second World War, the economic prosperity that Western Europe experienced attracted a significant number of immigrants from developing nations, especially from Africa.

Developed nations continue to be the major destinations for most immigrants from developing countries seeking economic prosperity. Some of the major migration crises involve 2015 migration on the South Eastern borders of the European Union and the 2018 Mexico/US border crisis. Other major crises include the 2019 Turkey, EU and Greece border crisis, and the 2021 Belarus/Poland and Lithuania crisis (“UNHCR – Refugee Statistics”). There are two major types of immigration, including short-term and long-term immigration. Short-term immigration involves moving into a country for less than 12 months. Long-term immigration occurs when one moves into another country that is not their usual residence for more than 12 months. Easing restrictions is one of the leading reasons for the increased rate of migrations. However, due to the COVID-19 pandemic, migration reduced by 27% due to the travel restrictions most governments put in place to control the pandemic (Nowrasteh). With the persistence of major migration drivers such as population growth, globalization, economic pressure, environmental stress, and urbanization, migration is projected to rise significantly in the future.


Migration is vital for the economic prosperity of the recipient country. For instance, short-term immigration creates more market for local goods by increasing the demand for the products. Short-term immigrants’ arrival in a country distorts the supply and demand balance, thus creating a supply deficit. Therefore, there will be more production of goods to offset the shortage and satisfy the demand created by the immigrants. Increased demand will lead to the creation of more jobs in the economy and infrastructural development (Edo 9). As a result, the economic performance of the host country improves, and the general economy grows due to aggregate demand. This form of demand influences increased budget revenues due to income growth from taxes and fees levied on the goods produced.

Long-term immigration is equally beneficial to the employment sector of the host country. Long-term migrants tend to provide additional labor to the market, essential for increased productivity and infrastructural development. According to Migration Policy Institute, 32% of the migrant adults (12.6) had a bachelor’s degree or higher credentials (Batalova et al.). Therefore, many immigrants qualify for various employment positions. Immigration has been cited for causing the problem of dumping in the labor market and causing a decrease in the wages of the workers in the host country (Edo). However, the local population is often insufficient to provide adequate labor needed to serve the available employment opportunities. This inadequacy creates labor demand usually offset by the immigrants’ labor. Due to increased productivity as a result of the labor provided by the immigrants, more jobs are created in the economy, and infrastructure is developed (Edo). Additionally, immigration improves the quality of the labor force by influencing the local population to be more creative and intellectual to suppress the competition created by the migrant workers. Improved quality of labor in the market leads to vertical mobility.


The COVID-19 pandemic created a serious labor shortage in the United States and most parts of the world. For instance, more than 47 million workers in the US quit their jobs in 2021 in what came to be referred to as The Great Resignation (“America Works Data Center”). Many employees who left their jobs cited the need for an improved work-life balance and flexibility. Other leading reasons for The Great Resignation are increased compensation and a strong company culture (“America Works Data Center”). The void created by the resignation of the local employees is being filled by the migrant workers who are willing to work in the existing conditions. The migrants’ labor provides a grace period for the revolution of the job market, giving employers time to adjust according to the expectations of the local employees without halting their operations.


Immigration imposes an excessive burden on the economy by increasing social structure pressure. Unemployed immigrants tend to benefit from the services of the government without paying taxes that run the public facilities they are using. Countries experiencing a high influx of immigrants have to increase the cost of their revenue on services such as healthcare and education to accommodate the immigrant population. For instance, the US spends more than $18 billion to finance the healthcare of unauthorized immigrants (Flavin et al.). Most of these funds are drawn from the taxes contributed by the citizens.

Furthermore, immigration has been a significant cause of the problem of unemployment. Many immigrants are taking employment opportunities meant for the local population, thus rendering local workers unemployed (Edo). As a result, the competition in the labor market increases. When this competition is stiff, the wages are likely to reduce due to readily available labor. Many immigrant workers tend to be willing to work under the prevailing wage rates at the detriment of the local population, which often requires conducive working conditions and favorable wages. In addition, immigration creates a social-cultural conflict between the local population and the immigrants whose cultural backgrounds contradict that of the local population. Such a conflict can result in discrimination and other forms of social injustices.


To summarize, with proper migration policy and management, immigration can stimulate the development and economic wellbeing of the citizens in the recipient country. Immigration presents positive and negative consequences. However, the positive effects of immigration outweigh its negative impact, especially by preventing labor shortages in the economy and increasing the demand for products. Additionally, immigration increases creativity and innovation in the labor market due to increased competition. Improved quality of the labor force leads to increased productivity which stimulates economic growth of the recipient country.

Works Cited

“America Works Data Center”. Uschamber.Com, 2022.

“International Migration 2020 Highlights | United Nations”. United Nations, 2021.

“UNHCR – Refugee Statistics”. UNHCR, 2022.

Batalova Jeanne, Andriy Shymonyak, and Michelle Mittelstadt. “Immigration Data Matters”. Migrationpolicy.Org, 2020.

Edo, Anthony. “The impact of immigration on the labor market.” Journal of Economic Surveys 33.3 (2019): 922-948.

Flavin, Lila, et al. “Medical expenditures on and by immigrant populations in the United States: a systematic review.” International Journal of Health Services 48.4 (2018): 601-621.

Nowrasteh, Alex. “The Decline of Legal Immigration.” (2022).

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