Here’s why immigrants to the U.S. are “job makers” more often than “job takers”

For a nation founded by immigrants, the U.S. has always harbored a considerable amount of anxiety toward them. Many anti-immigration movements, some of which endure to this day, suggest that immigrants compete with native-born citizens for work, drive down wages, and have a generally negative effect on the economy.

But are these claims true? A new study soon to be published in American Economic Review: Insights suggests that immigrants fill a number of important economic roles and are more likely to start businesses, making them “job makers” more often than “job takers.”

Immigrants get the job done

Like many other questions in economics, whether immigrants are “taking jobs” from the native born is a question of supply and demand. As more people move into an area, the labor supply rises. This means that each individual worker has more people to compete with when applying for a given job. In principle, this could drive down wages as people lower their salary expectations to improve the likelihood that they get hired.

Of course, people that move into an area can also increase the labor demand — colloquially referred to as “creating jobs.” If a person moves into an area and then starts a business that requires employees to operate, they increase the demand for labor in that area without expanding the supply. In principle, this would raise wages because workers have more options to choose from when looking for work.