The economic legacy of the Biden immigration surge

The historic immigration surge following the pandemic has had a profound impact on the U.S. economy, according to new research presented at the Brookings Papers on Economic Activity. Analysts estimate that roughly 6.5 million migrants entered the country illegally from 2021 to 2024, representing at least 2% of the population at the start of that period.

Each additional migrant added around 0.4 jobs, contributing to an estimated 1.6 million new positions in major metropolitan areas, which accounted for 18% of employment growth during the period. The surge also led to a 1.5% increase in GDP per average metro area.

Despite the influx, native-born workers saw no decline in employment rates and experienced a 0.9% increase in wages between 2021 and 2024. The researchers attribute this stability to the complementary relationship between immigrant and native-born workers, as hiring one immigrant often resulted in better productivity due to pairing native workers with immigrants.

The surge coincided with a booming economy, with employers struggling to fill positions, particularly in sectors like leisure, hospitality, and construction. The influx of migrants provided a much-needed workforce during this period, successfully absorbing the additional labor demand.

The immigration surge also had a modest impact on housing costs, raising rents by 1.4%-1.6% from 2021 to 2024. Many of the migrants initially stayed in shelters, emergency housing, or with friends and family. The findings offer a detailed economic assessment of one of the largest immigration waves in modern U.S. history, providing valuable insights into the economic consequences of the surge and its relationship with native workers and housing markets.