Immigration and Economic Growth

Interesting study from the Fiscal Policy Institute on the role of immigrants in growing regional economies. They looked at the nation’s twenty five largest metropolitan areas – including metro Detroit – and found that immigration spurs, rather than retards, economic growth.

More specifically the growth in the immigration share of the labor force and growth in big metro economies, by and large, go hand in hand. For example, metro Phoenix which had the second largest percentage point gain in immigrant share of the labor force from 1990-2007 had, by far, the highest economic growth rate.

The new isn’t all positive. Almost never is. There is some evidence in this and other studies that immigrants, in lower skill occupations, put downward pressure on wages. Which means that the contribution immigrants make to income growth per worker is dependent on the education attainment of a region’s foreign born population

How does metro Detroit stack up? Immigrants share of the region’s economic output is eleven percent, more than their share of the population. Metro Detroit’s workforce is ten percent foreign born compared to twenty percent for the nation’s largest metros and twelve percent nationwide. Between 1990 and 2007 the region’s foreign born share of the workforce grew from 5.5% to 9.9%, the third smallest increase of the twenty largest regions nationally.

Hard to look at this data and conclude, as many do, that immigration is a cause of metro Detroit’s economic decline. In fact, the preponderance of the evidence is that the opposite is true: we would have a stronger economy if our foreign born population was closer to the national average.

Immigrants, along with recent college graduates, are part of increasingly globally mobile talent who add to economic growth. The places that will do the best are those that are welcoming to talent from anywhere on the planet.

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Lou Glazer

Lou Glazer is President and co-founder of Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future’s mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy. Its work is funded by Michigan foundations.

This Post Has 3 Comments

  1. My second UM tech transfer startup in Ann Arbor, Zattoo, had Indonesian, mainland Chinese, and Swiss founders, with Russian/Australian, Korean, and Malaysian UM alumni and remote engineers in France and Spain, growing our Internet TV service from 400k to over 5 million subscribers across 8 countries in Europe. And we were the first company to legally broadcast the American ABC television network outside the US. 🙂

    We need to build strong Michigan companies for the global market. Immigrants go where there is opportunity, but to many, it’s unclear what unique opportunity exists in Michigan.

    Paul Graham (http://www.paulgraham.com/foundervisa.html) suggested to me last year that Michigan ought to find a way to secure visas for immigrant startup founders, as Singapore has done quite successfully. This idea has blossomed into a movement, supported by venture capitalists across the country: http://startupvisa.com/

    I travelled with several investors and entrepreneurs to Tokyo, Shanghai, and Beijing last year (http://geeksonaplane.com), where the startup community in some of these cities was predominantly white expats! I met a retired American CFO who IPO’d a solar company in Shanghai, many Silicon Valley expats in Tokyo, and learned of the first South African investors in Tencent (http://www.google.com/finance?q=HKG:0700). It goes both ways.

  2. […] 无论在全球各地,我们必须挖掘人才。“密歇根州未来”的负责人娄格雷泽已经反复强调关于人才对于促进区域和密西根经济的重要性。援引一项财政政策研究所的研究。(http://fiscalpolicy.org/new-report-models-immigration-reforms-affect-on-state-and-local-taxes) 该研究着眼于移民对于不断增长的地区经济的作用。调查发现在全国25个大城市,包括大底特律区,移民刺激经济增长,而非阻遏。http://www.michiganfuture.org/01/2010/immigration-and-economic-growth/ […]

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