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New Study: Without Immigration, Social Security and Economic Growth Under Increased Threat

Tuesday, August 22, 2017

Washington, D.C.– As America’s population ages dramatically in coming decades, healthy levels of immigration will play a critical role in keeping overall economic growth strong and mitigating the added strain on social safety net programs like Social Security, according to a new white paper released today by the Bipartisan Policy Center.

The paper, America’s Demographic Challenge: Understanding the Role of Immigration, examines population trends and projections to show that immigrants play a key role in boosting economic growth. Today, more than a quarter of all new U.S. businesses are started by immigrants.

Crucially, the paper also finds that immigration is one way to reduce the old-age dependency ratio and boost the solvency of the Social Security trust fund. In fact, the paper notes that in the Social Security Administration’s own modeling, recent immigration proposals that expand the labor force could extend trust fund solvency by up to two years and increase reserves by nearly $300 billion over 10 years.

As the native-born U.S. population ages, more working-age immigrants fill the gaps, keeping America’s economic growth strong and financial footing sound.

“Immigration is one of America’s key defenses against economic stagnation like we see in Japan, for example,” said Theresa Cardinal Brown, BPC’s director of immigration and cross-border policy. “As the native-born U.S. population ages, more working-age immigrants fill the gaps, keeping America’s economic growth strong and financial footing sound.”

BPC’s own past modeling has shown that various labor-force growing immigration reform proposals could reduce federal deficits by hundreds of billions of dollars over the next decade. Conversely, BPC’s analysis of a scenario in which all undocumented immigrants depart the United States found that the federal budget deficit would increase by about $800 billion over 20 years.

“Robust levels of immigration can go a long way toward improving the nation’s long-term economic outlook,” Brown said. “Smart immigration policy that expands the pool of available labor—whether high-skill or lesser-skilled—would likely have a positive effect on economic growth and help boost the solvency of the Social Security system.”

KEYWORDS: DEMOGRAPHICS, IMMIGRATION, THERESA BROWN