Economics Archives - Working Immigrants

Adverse economic activity due to ICE enforcement

Besides the Brookings study on employment I wrote about yesterday, another study published in May 2026 estimates that ICE enforcement reduced economic activity by 2.7% and spending by 6.2% in 2025. The author focused on high ICE enforcement cities. He used data provided by SafeGraph, a commercial data company that aggregates anonymized credit- and debit-card transaction records. Retail outlets such as restaurants, stores, pharmacies and gas stations were covered.

The time period measured was Feb 2025 through Feb 2026 for foot traffic and Feb 2025 through Dec 2026 for spending.

The effects were strongest geographically near raid locations and did not fade over time. They extended beyond immigrant and Hispanic neighborhoods, affecting residents and businesses throughout targeted metropolitan areas. Independent businesses suffered substantially more than national chains, while restaurants, hotels, construction, transportation and personal-care businesses were among the hardest hit.

Adverse employment impact of heightened ICE enforcement

A Brookings study of May 2026 finds that the surge in ICE enforcement reduced employment reduced the number of expected jobs by 688,000. The period studied was the first half of 2025. This a shortage from expected for all would be job occupants – not distinguishing between citizens, authorized and unauthorized foreign born. The analysis indicates the relatively lower employment was due in part to arrests and in part due to fear of arrest, which the “shock and awe” approach was designed to do.

(The total is from employment data, not surveys.)

Since the number applies only to the first half of 2025, it is certain that the total losses have been much higher. Because of the pandemic and the Biden-caused surge in employment during his administration, I think it is safer to use the increase of total employment in 2019 as a reference. In that year it was about 1.8 million. Assuming that all-2025 effect was a relative loss was a high as 1.5 million-plus, that means that the loss approximated one years’ normal gain in employment. Using another assumption that 75% of the loss is for unauthorized workers, which stood at about 8 million in 2019, that implies that, in order of magnitude, one tenth of unauthorized workers left employment. This is a conjecture, and only for 2025.

“We find that employment trajectories in surge and non-surge cities were closely aligned before enforcement began. They diverged precisely when ICE arrests intensified. The gap widened over time, and the knock-on effects extended far beyond those directly targeted. In surge cities, employment fell most in immigrant-intensive sectors, but job losses spread further.”

“We isolate the surge from other forces: tariffs, inflation, and AI, operating simultaneously on the broader economy. The findings are stark: Job losses in surge cities far exceeded the number of people arrested, and the damage extended well beyond the workers who were directly targeted. The pattern of excess job loss is consistent with fear-driven labor withdrawal, business disruption, and weaker local demand.”

How Trump has squeezed the H-1B program

The Trump administration on May 22 threw a wrench into the gears for employment-based green cards by making it more burdensome for H-1B visa holders to apply for a green card. That’s the latest step in Trump’s long campaign to limit the H-1B program or holders of that visa.

First Trump administration – key changes, which were reversed watered down or not otherwise implemented:

Higher minimum wages. The Labor Department would have reset required H-1B wage levels much higher, so employers could not hire foreign professionals at wages below new government benchmarks. In practice, many H-1B workers would become too expensive to sponsor, especially in lower-paid regions or occupations.
Narrower “specialty occupation” rules. DHS would have required a tighter match between the job and a specific degree field. A general degree, or a job open to several related degrees, might not qualify. This would make H-1B approvals harder for flexible or hybrid professional jobs.
Limits on early-career professionals By favoring higher wage levels, the rules would disadvantage new graduates and junior workers, who are usually paid Level 1 or Level 2 wages. The likely result: fewer H-1Bs for international students just leaving U.S. colleges and entering entry-level professional jobs.
Replacing the lottery with wage-based selection Instead of randomly selecting H-1B registrations when applications exceeded the cap, USCIS would rank or prioritize workers by offered wage level. Higher-paid applicants would move ahead. Lower-paid applicants would remain technically eligible but would have much lower chances.

Second Trump adminstration

$100,000 H-1B charge. The administration imposed a $100,000 payment for many new H-1B petitions. Law suits have kept the policy implementation unsettled. An exemption for doctors has been requested but not formally resolved.
Replacing the lottery. Trump again has introduced a weighted system to replace a lottery, to be effective in FY 2027. This effectively removes the program for lesser paid early career professional.
Higher prevailing-wage levels. Again, re-implementation of an attempted first administration policy, with a Labor Dept rule issued in March, 2026.
Return to country of origin for a green card. Holders of an H-1B visa must return to their country of origin to apply from there. This rule was issued on May 22. This rule affects many more than H-1B holders. Many H-1B holders have planned to and succeeded in transitioning from H-1B to green card. In past years, about half of the 140,000 employment-based green card awards have gone to H-1B holders and their families.

Impact of deportations on American workers

Has deportation of unauthorized persons made a positive impact on legal worker hiring and wages? Two studies conclude that the impact on native American workers is mixed, and sometimes adverse. There is no evidence that native workers are getting a lot more jobs and a lot higher pay.

A February paper used a model which assumed that half of unauthorized workers would leave the workforce. It concluded overall that mass deportation gives native workers a small short-run wage bump, but lowers average native real wages in the long run.

In the short run, the capital stock is fixed. With fewer workers using the same capital, the model estimates very small short-term gains. But it also predicts that more labor-saving capital will be invested. That would reduce wages in a small way. Again,, this is the results of a model, not actual experience.

But native wages rise where (1) unauthorized workers are heavily concentrated and (2) where natives can substitute into those jobs. In some states, native farming/forestry wages rise much more: California 7.17%, South Carolina 6.69%, and Oregon 6.55%. the model used an estimate that 35% of farm workers are unauthorized.

The paper: Cravino, Javier, Andrei A. Levchenko, Francesc Ortega, and Nitya Pandalai-Nayar. “The Economic Impact of Mass Deportations.” NBER Working Paper No. 34790, National Bureau of Economic Research, February 2026.

A May paper looked at actual labor market behavior. In areas with large increases in ICE arrests, unauthorized employment fell, but U.S.-born workers did not step into those jobs. The researchers looked at the complementarity of work in construction – that is, the effect of total employment say in residential construction when one labor component (common laborers, roofers, etc.) that are heaving – foreign-born fall short. The researcher estimated that native construction workers with high school or less experienced a 3% decline in affected areas. The Washington Post summarized this paper as for every six unauthorized male workers displaced, one native worker with a high school degree or less also lost a job. They estimated job losses for native workers in farming, construction, and manufacturing.

The paper: Elizabeth Cox and Chloe N. East, “Labor Market Impacts of ICE Activity in Trump 2.0,” NBER Working Paper No. 35129, May 2026.

More on the contribution of immigrants to innovation

Here is a study which estimates that that immigrants are responsible for 32% of aggregate U.S. innovation, with more than half of that effect coming from spillovers to U.S.-born collaborators.

Stanford Business School researchers, using patent records, identified likely immigrants and patenting from 1990 to 2016. They found that immigrants made up about 16% of U.S.-based inventors but produced 23% of patents, 24% of citation-adjusted patents, and 25% patent economic value.

Why the contribution is so large

This can be explained not be brilliance but by demographics. Immigrant inventors are especially productive in the middle of their careers, when inventive output typically peaks. The share of foreign born residents with post graduate degrees is about the same as U.S. citizens (about 15%) but as I have noted before they tend to arrive in a concentration of prime working age (25- 45).

They also appear more likely to work in fast-moving technology sectors and in major innovation hubs. Immigrant inventors are more connected to global knowledge flows. They rely more on foreign technologies, collaborate more often with foreign inventors, and are cited more often abroad.

The authors claim is that immigrants raise the productivity of collaborators. Using premature deaths of inventors as a natural experiment, the authors find that when an immigrant inventor dies, the decline in co-inventors’ productivity is larger than when a U.S.-born inventor dies.

Source: The Contribution of High-Skilled Immigrants to Innovation in the United States

three key issues in Trump administration immigration policy

To capture in relatively few words Trump’s immigration policy, I focus here on three especially contentious fronts: birthright citizenship, refugee policy, and deportation law enforcement. Each involves not only legal rules, but competing ideas about what the United States is obligated to protect, tolerate, or exclude.

Birthright Citizenship

The birthright citizenship dispute centers on the Fourteenth Amendment of 1868, which states that all persons “born or naturalized in the United States and subject to its jurisdiction,” are citizens. The exception has traditionally been narrow: diplomats, hostile occupying armies, and historically certain members of Indian tribes. The January 2025 Trump executive order sought to deny citizenship to children born in the United States to unauthorized immigrants and to some temporary visa holders. According to the presentation, this could affect roughly 250,000 to 300,000 births annually to unauthorized persons and another 50,000 to 70,000 births to temporary visa holders, out of about 3.6 million births a year overall.

The pro–executive order argument tries to read “subject to the jurisdiction” as requiring something like allegiance or domicile, claiming that mere physical presence is not enough. This view has little support in American jurisprudence, and there is no substantial tradition of using voluntary allegiance as a legal test for citizenship at birth. The anti-order view is that jurisdiction means subjection to sovereign authority, not emotional or political loyalty. On that reading, the children in question are plainly within U.S. jurisdiction. The underlying conflict is therefore not just legal but philosophical: whether American citizenship at birth is rooted in territory, as in the older British jus soli tradition, or in parental-qualified membership and more restrictive ideas of belonging.

Refugee Policy

The modern refugee system emerged from the forced displacements of World War II and was codified in the 1951 Convention Relating to the Status of Refugees. Its core definition describes a refugee as someone with a well-founded fear of persecution based on race, religion, nationality, membership in a particular social group, or political opinion. A central principle is non-refoulement: refugees should not be sent back to places where they face persecution.

Against that background, Trump-era policy is a sharp narrowing of refugee admissions. Pre-Trump annual refugee targets had ranged from 45,000 to 125,000; by October 2025 the target had fallen to 7,500, with admissions effectively narrowed to Afrikaners in practice. There are several channels of what the public would regard as refugees: protection for people already inside the United States, such as asylum, Temporary Protected Status, and humanitarian parole. Trump imposed severe actions toward Venezuelans, including efforts to shut down TPS for roughly 600,000 people, close humanitarian parole for 120,000, and accelerate the processing of 300,000 pending asylum claims. Afghans and Ukrainians are separate policy cases. Refugee and humanitarian policy is not one coherent system so much as a series of politically shaped exceptions and restrictions.

Deportation and Law Enforcement

Immigration and Customs Enforcement operates in the interior, while Customs and Border Protection is responsible for the borders. ICE’s central role is removing unauthorized persons, but its practical reach is limited by court backlogs, detention space, state and local cooperation, and the distinction between civil and criminal violations.

The legal distinctions matter. First-time unlawful entry is a misdemeanor; repeated unlawful entry is a felony. Simply being present in the country without authorization, such as after a visa overstay, is generally a civil infraction, though one with major consequences. Smuggling and document fraud are felonies. These categories shape who can be detained, prosecuted, or removed and on what grounds. ICE has in the past removed roughly 300,000 to 400,000 people annually and held around 35,000 in detention. Reaching deportation goals on the order of one million annually would therefore require a major expansion in arrests, detention, court processing, and cooperation from states and localities. Deportations since January 2025 may be in the 600,000 range, but many uncounted may have left on their own. The total number of vulnerable persons may be around 14 million, but the precise number is impossible to estimate and the legal battles are many. Were the administration to deport one million, that will require arresting many persons who have been year for some time and are employed often for years.

Contested court battlegrounds in enforcement include access to private property, the difference between administrative and judicial warrants, detention without habeas corpus, border turn-backs, and the role of state and local participation under programs such as section 287(g). The broader point is that deportation policy is constrained not only by law and civil liberties, but by the sheer limits of bureaucratic capacity.

Global migration since WW II in 400 words

Mass rebalancing of population via migration, an altered wealth-and-people equilibrium, a world where technology is making the movement of peoples easier than ever, wars and demographic trends have driven world migration since WW 2. Government policy has been largely deficit. Japan, for instance, is trying to increase immigration in the face of cultural resistance. U.S. policy is captured. by vested interests. Public dialog has been poor in transparency and vision.

Global Migration in the Modern World

Global migration has become one of the defining forces of modern life. There are many forms of movement: voluntary migration for opportunity, forced migration through slavery or expulsion, domestic migration within countries, circular migration for work, and flight from war, persecution, state collapse, and natural disaster. Since 1945, major displacing events have included postwar upheaval in Europe, the partition of India, the Korean War, the Vietnam refugee crisis, the Soviet war in Afghanistan, the breakup of Yugoslavia, the Rwandan genocide, and more recent conflicts in places such as Syria, Myanmar, South Sudan, and Venezuela.

Why Migration Has Expanded

Migration has grown not simply because people are desperate, but because movement has become more feasible and more rewarding. The share of the world’s population living outside its country of birth has risen from about 2.5 percent in the 1960s to 3.7 percent in 2026. At the same time, remittances have surged, higher education has expanded dramatically, and international students now number about 7 million worldwide. Transportation, communications, global banking, and diaspora networks all make it easier for migrants to move, remain connected, and support families back home.

Channels of migration have evolved: Germany with Turks, France with North Africans, Spain: with Northwest Africa and Latin America, Britain with the Caribbean, United States with the Caribbean basin. Within these channels are narrower ones, such as the migration of educated, talented and politically adept Indians with roots in East Africa into both the U.K. and the U.S.

Policy, Demography, and the Future

Migration is inseparable from aging societies and weak workforce growth in many advanced countries. Fertility rates are now below replacement in most of the world outside Sub-Saharan Africa, with Bulgaria and South Korea standing out as facing severe futures. Countries such as Japan, Germany, Canada, and the United States face labor shortages or demographic strain. The U.S. – Indian transnational IT workforce grew since the 1980s. Canada is the best model of an advanced country which as promoted immigration for economic growth as well as being a generous settler of refugees.

Yet immigration policy often remains confused, politically distorted, or poorly designed. The central challenge, then, is not whether migration will continue, but how states will manage it in a way that balances fairness, national cohesion, and human need.

A touch of evil

Documented reports that the Trump administration is thinking of banning the sending of remittances from the United States to Haiti. The article centers on Johane, a Haitian medical student whose life was transformed by money sent from relatives in New York after she fled gang violence in Port-au-Prince. Those remittances allowed her to continue her education safely and become a doctor serving patients in Haiti. She fears a proposed U.S. ban would cut off that lifeline, leaving her unable to provide medicine and pushing already vulnerable families toward starvation.

One third of Haitian families receive remittances.

On March 2, 2025, DHS wrote in social media: “American dollars should NOT be used to subsidize foreign economies. Four years of open borders under the Biden Administration allowed 6% of ALL Haitians to enter our country ILLEGALLY. Many of these Haitians sent remittances back to their home country — making up 20% of Haiti’s ENTIRE ECONOMY and taking $6.1 BILLION from America. We will keep fighting to end this. Under @POTUS Trump and @Sec_Noem, our top priority is to put the safety and prosperity of the American people FIRST.”

(More reliable sources cited by Documented say that $2B flowed in 2021 from the U.S. to Haiti in remittances, accounting for 16% of GDP.)

Haiti is part of the American basin of cheap labor. I looked at how ten Latin American and Caribbean countries are economically dependent on their citizens who live outside their countries. (See the list at the end, below). For the most part, the great majority of their expatriate citizens are in the United States. Since 1960, they make up 20 million or 45% of all immigrants today. They include 4 of the top 10 countries of origin of American immigration since 1960. The American Basin has a blended average per capita income of $17,000. 21% of the citizens live outside their country. Remittances back to the Basin counties are equivalent to 8% of GDP.

Many foreign-born workers are in high risk jobs

Some jobs, such as logging, have relatively high fatality rate, but few workers. Other jobs are have a lot of workers, many foreign-born workers and many injuries. Here is a list of six jobs with a lot of workers, a lot of foreign-born workers, and much higher than average injury rates. Many of the workers are unauthorized and their deportation causes a labor shortage. (Lost time injury rate is a useful rate to analyze injury risk.)

Laborers and Freight, Stock, and Material Movers.
3.0 million workers. 25% are foreign-born. Lost-time injury rate little more than three times the national average. The high rate reflects frequent lifting, repetitive strain, and handling of heavy materials.

Driver/Sales Workers and Truck Drivers.
3.3 million workers. 18% foreign-born. Lost-time injury rate roughly three times the national average. Injuries are commonly associated with vehicle incidents, loading and unloading freight, and overexertion.

Construction Laborers.
1.2 million workers. This occupation has one of the highest immigrant concentrations in the construction trades, with 28% of workers foreign-born. Lost-time injury rate two and a half times more hazardous than the national average. Typical injuries result from falls, heavy material handling, and the use of power tools and equipment.

Nursing, Psychiatric, and Home Health Aides.
3.6 million workers, making it one of the largest service occupations in the country. 27% are foreign-born, the share even higher in home-health services in many metropolitan areas. Lost-time injury rate more than three times the national average. Most injuries occur during patient handling and lifting, slips and falls, or workplace violence in healthcare settings.

Carpenters.
1.0 million workers 23% foreign-born. Lost-time injury rate two and a half times more dangerous than the national average. Injuries commonly result from falls from ladders or scaffolding, power-tool accidents, and repetitive physical strain.

Roofers.
Roofing is a smaller but highly hazardous occupation employing about 135,000 workers in the United States. 30% foreign-born, one of the highest shares among construction occupations. Lost-time injury rate nearly four times the national average. Roofing work combines fall hazards, heavy material handling, and exposure to extreme weather, making it one of the most injury-prone occupations in the American labor market.

One way U.S. competes to attract foreign students

The Optional Practical Training (OPT) program allows international students to work temporarily in jobs related to their field of study as part of their training. If the U.S. wants to continue to attract STEM students from abroad, OPT must be kept viable. It is part of America’s dominance over international STEM education — which is slipping away due to competition by Chinese and English language higher ed elsewhere.

Created by regulation, participation rose from 25,000 in 2007 to 300,000 by 2024–2025. These are the numbers of international students actively enrolled in OPT.

It often functions as a bridge into long-term immigration. During OPT, graduates can work for U.S. employers and seek sponsorship for visas such as the H-1B, which in turn may lead to a green card. Half of H-1B visa holders with U.S. degrees previously participated in OPT.

.The impact on American college enrollment is substantial. About 56% of graduates from 2006–2022 participated in OPT, with much higher participation among advanced degree holders and STEM graduates. 68% of STEM graduates and more than two-thirds of PhD and master’s graduates entered the program.

Here is a summary of the program as presented on the website of Babson College.

The rest of the world, notably by English speaking countries, has grown its international student population very fast. Canada had in 2015 about 350,000 international students. Today it has about one million international students. Meanwhile, international student enrollment in the U.S. marginally increased from one million to about 1.2 million. (Go here.)

The program should be viewed in the context of the high presence of international students on campus in STEM education.. Over half of graduate students in engineering and computer science in U.S. universities are international. 72% of full-time graduate students in computer and Information sciences are foreign-born. Until recently the U.S. dominated global higher education in some STEM subjects