The Future of Immigration and Its Economic Impact on the U.S.

As Independence Day is celebrated, it prompts reflection on the country’s foundational ideals, including immigration’s role in building a better life here. This narrative pertains not only to America’s historical roots but also its economic trajectory. A recent decline in immigration due to restrictions like fewer green cards, travel bans, and reduced refugee and asylum grants signals a significant drop. The U.S. Census Bureau reports that net international migration peaked at 2.7 million in 2024, decreased to 1.3 million in 2025, and is expected to plummet to 321,000 in 2026, marking an unprecedented decline.

Restrictions are often justified by claims that immigration adversely affects state and local budgets. However, dismissing these concerns is not prudent, as any swelling population does stress public services. A study, coauthored recently, challenges the notion that immigrants solely burden state economies. Data from all U.S. states between 2008 and 2023 show a 1 percent population increase from immigration correlates with a 1.5 percent rise in private-sector GDP. This GDP rise surpasses population growth percentage-wise, varying significantly by state.

Simulations predict that a 1 percent population increase purely from immigrants boosts private-sector GDP from 0.57 percent to 4.41 percent, contingent on state specifics. States with smaller immigrant populations like West Virginia, Montana, Mississippi, North Dakota, and Wyoming demonstrate substantial effects, as do economically liberated states like New Hampshire, South Dakota, Idaho, and Tennessee.

Recent demographic trends, worrying the U.S. economy’s future, underscore the findings. The Congressional Budget Office (CBO) foresees decelerating U.S. population growth over 30 years, declining from an average of 0.3 percent annually for the next decade to 0.1 percent per year from 2037 to 2056. As fertility rates drop, net migration gains prominence, with forecasts showing a population decline starting in 2030 sans immigration. Aging demographics exacerbate concerns, with projections indicating the ratio of individuals aged 25-64 to those over 65 dropping from 2.7 now to 2.2 over the next 30 years. This decline signals fewer people contributing to social services and caring for the elderly.

States face significant implications from these changes. Despite immigration law being federally governed, national representatives could reform immigration for their state’s benefit. Rural and less government-burdened states could profit most from reforms. Ironically, states voicing immigration apprehensions also express concerns about population loss and workforce shortages. They have the strongest argument for immigration’s benefits.

States could implement policies to capitalize on immigration advantages: lowering taxes, shrinking government roles, reducing regulations, and easing pathways for newcomers to work, start businesses, transfer credentials, and obtain licenses, accelerating their transition from arrival to economic contribution.

Americans value their immigrant roots and the nation as a global hope and freedom symbol. Gallup reveals a record-high 79 percent of Americans view immigration positively. Concerns that immigrants might drain resources don’t align with study findings; immigrants are key players in the economic future, enabling mutual benefits. Especially for states seeking growth, immigrants are not merely costs—they’re cornerstones of future economic structures.

John Bitzan serves as the Menard Family Director at the Sheila and Robert Challey Institute for Global Innovation and Growth at North Dakota State University.

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