The Economic Cost of Immigrants

By May 19, 2017Blog

Earlier this month, Governor Greg Abbott signed Senate Bill 4 into law, which officially bans sanctuary cities in Texas. The new legislation requires local law enforcement agencies to follow all federal immigration laws and detainer requests, and establishes stiff penalties for individuals that do not follow the new law.

SB 4 is the latest measure that has been taken to curtail immigration flows since President Trump was sworn in. Yet central to this debate, is a question that is seldom mentioned in the public forum: What are the economic and fiscal impacts of immigrants?

Ironically, President Trump addressed this question during his Joint Address to Congress back in February. To defend his immigration policy, the President stated the following:

 “The current, outdated system depresses wages for our poorest workers, and puts great pressure on taxpayers. Nations around the world, like Canada, Australia and many others — have a merit-based immigration system. It is a basic principle that those seeking to enter a country ought to be able to support themselves financially. Yet, in America, we do not enforce this rule, straining the very public resources that our poorest citizens rely upon. According to the National Academy of Sciences, our current immigration system costs America’s taxpayers many billions of dollars a year.”

Regrettably, these statements have been taken out of context and do not reflect the conclusions reached by the National Academy of Sciences. In fact, the authors of this particular study responded to President Trump in an article published on

In short, the authors reached the following conclusions about immigrants and their impact on the economy:

  • Today’s Immigrants are more likely to have a college education compared to their native-born peers
  • There is no evidence of wage depression or “taking jobs away” from native-born, high school-educated workers
  • Immigrants have been integral in driving economic growth. They consume goods, purchase homes, and increase human capital which spurs innovation, entrepreneurship, and technological change.
  • Immigrants help pay for defense expenditures and the interest payments from our national debt – two major fiscal burdens on our economy. All the while, the arrival of additional immigrants do not cause these burdens to increase.
  • States take on immigration costs that are later recouped by the federal government, which shouldn’t be an argument for restricting immigration. Rather, it highlights the need for better cost sharing between state and federal government entities. 

At AngelouEconomics we know the value that immigrants bring to our economy. If you’re interested in investing in startups founded by foreign-born entrepreneurs, take a look at our portfolio in the International Accelerator: 

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