PWBM projects that by 2050 one in ten U.S. citizens will be foreign-born, up from 7 percent today. We account for different historical naturalization patterns of immigrants from different countries, including the time immigrants reside in the U.S. Thus, this increase reflects shifts in the origins of lawful immigrants. In particular, we project that the shift away from immigrants arriving from Mexico and toward immigrants arriving from Asia to continue.
The Effects of Changes to Immigration Policy on the United States’ Population
We project that increasing annual net legal immigration leads to a younger and more educated U.S. population. These population changes are likely to have a positive impact on entitlement finances and tax burdens relative to current policy. In contrast, decreasing annual net legal immigration likely has the opposite effects.
2020 Presidential Campaign Proposals for Immigration Policy: Indicators of the Economic Impact on Each State
Introducing PWBM’s Interactive 2020 Campaign Issue State Maps. We use data to inform people about the impact of campaign proposals on their states. Here we present six indicators focused on immigration policy for each state. Although PWBM has shown that increasing immigration boosts economic growth for the U.S. as a whole, these indicators imply that the impact of changes to immigration policy on a state will depend on the demographics of that state.
Immigration Policy: 2020 Presidential Campaign State-Level Economic Indicator Map
Use data to get information about the impact of campaign proposals on states. Examine six indicators focused on immigration policy for each state. See the percent of the population that is foreign-born, the percent of the foreign-born population with a bachelor’s or advanced degree compared with the percent of the native-born with a bachelor’s or advanced degree, the old-age dependency ratio, the child dependency ratio, and percent of the foreign-born population that is unauthorized for the U.S. and each state.
W2019-1 Prospects for U.S. Labor Productivity Growth: What the Penn-Wharton Budget Model’s Microsimulation Reveals
Authors: Jagadeesh Gokhale
USAFacts 2019 Annual Report - Our nation, in numbers.
Forbes Contributor, Sheila Callahan, covered USAFacts release of its third annual report on May 2, 2019. The report highlighted recent shifts in U.S. demographics, noting that seniors, 65 years and older, are now 16 percent of the population.
Decline in Housing-Driven Movement Ushers in Era of Less Migration
In a previous blog post, I considered how wage changes are related to the decision to move and the decline in household movement observed in the last two decades (see Figure 1 below). However, wage changes aren’t the only reason households choose to move. Changing motivations for moving are illustrative in examining the broader context of internal migration.
More Gains to Moving for College Educated Workers
Internal migration of working-age people in the United States has fallen by more than a third – from 18.9 percent in 1994 to 11.4 percent in 2018 (see Figure 1). This phenomenon has received significant scholarly attention – Cooke (2013) for example, attributes this decline to the rise of information and communication technologies. Alternatively, Molloy, Smith, and Wozniak (2011) point to broad macroeconomic shifts.
Reduced internal migration has important economic implications, particularly for labor markets. We find that wages grow faster for movers, especially for those with a college degree.
Marriage Matters for the Gender Pay Gap Among Self-Employed
The rise of the ‘gig economy’ means that understanding patterns of self-employment is more important than ever for designing tax benefits and subsidies that affect business activities. In fact, self-employment represents as many as 1 in 5 jobs.
We find that gender differences in self-employment patterns are mostly driven by the differences across marital status. Married women are more likely to be self-employed than single women. On average, self-employed married women work fewer hours than men and single women, regardless of employment type, and married women who are employer-employed. These differences carry over to earnings.
Why Are Recent Immigrants Better-Educated Than Ever Before?
In a previous blog post, I described two significant changes in the characteristics of newly arriving immigrants (legal and unauthorized) to the U.S. between 1997 and 2017. First, the share of recent immigrants aged 25 and older who had bachelor’s or advanced degrees rose from 30 percent to 48 percent. Second, the origins of new immigrants to the U.S. shifted dramatically, as immigration from Mexico and Europe declined in importance while immigration from Asia and Africa grew. In this post, I examine the relationship between these two changes.
Recent Immigrants Are Better-Educated Than Ever Before
From 1997 to 2007, a newly arrived adult immigrant to the United States was about as likely to have a college degree as to have not finished high school. During that period, each group accounted for about one third of new arrivals (including both legal and unauthorized immigrants). Over the decade since 2007, those odds changed dramatically. The share of recent immigrants with a college degree grew by nearly 50 percent, while the share without a high school degree fell by a similar proportion (see Figure 1). By 2017, a recently arrived immigrant was almost three times as likely to have a college degree as to have not finished high school.
For Teen Workers, Parents’ Education Matters
Teenage employment has declined significantly since the late 1990s. Using data from the Current Population Survey, Figure 1 shows that 63 percent of teens aged 16 to 18 worked in 1993, but that percentage fell to 41 by 2015.
Education and Income Growth
In the New York Times article “Why Is It So Hard for Democracy to Deal with Inequality?” Thomas B. Edsall relates the growth of income inequality in democracies to changes in voting patterns among those who are highly educated.
PWBM’s brief, “Education and Income Growth” was used to highlight that the incomes of highly educated people are growing in comparison to those with less education. The author finds that this trend motivates highly educated voters to support the continuation of current policy rather than policy reforms favorable to the working class.
W2018-1 Matching IRS Statistics of Income Tax Filer Returns with PWBM Simulator Micro-Data Output
Authors: Jagadeesh Gokhale
The Decline in Labor Efficiency in the United States
- Workers’ performance on the job is related to all of their demographic and economic attributes, including education, age, family structure, gender, race, labor force status (full- or part-time work), peer group (birth-year), and others.
- The annual market-wide “effective labor input” depends upon the quantity (number of work hours contributed) and the efficiency (related to worker attributes) of individuals engaged in market production.
- Labor efficiency is projected to decline in the future and offset growth in labor quantity to slow growth of aggregate “effective labor input.” Official government analysts typically do not project changes in labor efficiency, thereby imparting a more optimistic outlook to budget projections.
Population Aging
As in many of the world’s developed nations, America is undergoing a momentous increase in the share of older individuals in the population, or “population aging.”
Population aging will continue throughout this century because of baby-boomer retirements, longer lifespans due to declining mortality, and fewer newborns from reduced fertility.
Sustained population aging will pose a significant fiscal challenge: How best to provide funding for adequately supporting older generations’ consumption and health care.
Socioeconomic Patterns of Marriage and Divorce
- U.S. divorce rates remain high and the post-1970s marriage decline is continuing.
- The marriage decline is concentrated among those with fewer years of education.
- Low earnings and job insecurity induces single-parenthood with negative side effects on children.
Mortality in the United States: Past, Present, and Future
- The United States experienced an unprecedented decline in mortality during the twentieth century, thanks to improvements in public health, medical advances, and behavioral changes.
- But mortality and life expectancy improvements have been uneven across age and socioeconomic status.
- Future changes in mortality will affect the federal budget outlook. However, projections of mortality and life expectancy are highly uncertain. This uncertainty creates additional risk for the nation’s transfer programs to the elderly, which already account for half of government outlays.
The Effects of Immigration on the United States’ Economy
While some policymakers have blamed immigration for slowing U.S. wage growth since the 1970s, most academic research finds little long run effect on Americans’ wages.
The available evidence suggests that immigration leads to more innovation, a better educated workforce, greater occupational specialization, better matching of skills with jobs, and higher overall economic productivity.
Immigration also has a net positive effect on combined federal, state, and local budgets. But not all taxpayers benefit equally. In regions with large populations of less educated, low-income immigrants, native-born residents bear significant net costs due to immigrants’ use of public services, especially education.
Emergent Changes in American Demography and Social Organization
- The American Family is changing in response to the pressures and opportunities facing young individuals.
- Many children today are being raised by single parents, which is associated with a lower transmission of skills to succeeding generations.
- Technological advances and public provision of social protection benefits appear to be contributing to the decline of the nuclear family.