Immigration Won’t Solve the U.S. Population Slowdown

Policy-makers should pay attention to per capita GDP before they rush to encourage more immigration.

By Steven A. Camarota on February 21, 2022

The American Conservative, February 21, 2022

The recent release of the Census Bureau’s population estimates, which show the U.S. population has grown by “only” 393,000 between 2020 and 2021, has prompted a number of commentators to argue that we need more immigration to increase population growth. Otherwise, we are told, the country will be “older, less productive, and less dynamic”.

The view that “population growth is inextricably linked to economic growth”, while widespread, is mistaken for several reasons. Although immigration can certainly increase a country’s population, it is well established that it has only a small impact on the share of the population that is working-age. And while slower population growth — and the societal aging that generally accompanies it — will certainly require some adjustments, our economic future is not bleak on that account. Equally important, having a more stable population offers some significant benefits that population-boosters overlook.

Last year, Covid caused a dramatic increase in deaths and declines in both births and net migration. Once the pandemic is over, population growth will almost certainly rebound. Nevertheless, even before Covid, all three “components of change” — births, deaths, and net international migration (the number of people coming vs. the number leaving) — were moving toward slower growth prior to 2020. From mid-2018 to mid-2019 — the last full year before Covid — the Census Bureau estimated population growth was 1.5 million, less than the 2.3 million increase between 2015 to 2016 and significantly less than the nearly three million figure seen before the Great Recession hit in 2007.

Births fell significantly during the Great Recession and never recovered. There were roughly half a million fewer births in 2019 than there were before the 2007 downturn. Virtually every demographic group is having fewer children, particularly immigrants. The uncertainty associated with Covid reduced births by perhaps 140,000 more last year.

While births have been falling, the number of deaths has been slowly increasing, mainly due to population aging. Covid-19 caused a huge increase in deaths (520,000) from mid-2020 to mid-2021, related directly or indirectly (e.g. suicide, overdose, murder, and delayed medical care) to the pandemic.

As for net international migration, the number of new immigrants entering the U.S. declined, and out-migration increased during Trump’s first three years. Net international migration declined further due to Covid restrictions; the Census Bureau estimates it at 245,000 from 2020 to 2021, although this estimate does not include immigrants who came over in the ongoing border surge.

Since Biden took office, immigration — both legal and illegal — has rebounded dramatically. Apprehensions of families and children have soared since January of last year, and most were simply released into the United States. Moreover, legal immigration is increasing due to pent-up demand and a backlog of visas. As a result, net migration this year will likely be two or three times last year’s estimate, assuming the bureau is able to accurately measure immigration, which is not certain. Preliminary data also shows some recovery in births. While deaths remain elevated due to Covid, they are down significantly from their peak. Overall, population growth could be in the neighborhood of one million this year.

Even at this level, population growth would still be much lower than it was even a few years ago. My best guess is that the U.S. population will increase by between 10 and 12 million over the next 10 years. While substantial, this is much less than the 22 million the bureau had projected. The aging of baby boomers and the new, seemingly permanent, norm of lower fertility are going to shape our immediate demographic future.

Of course, the one wild card is immigration, which can add a lot of people. Justin Gest at George Mason University proposes doubling immigration. Matthew Yglesias wants to use immigration to add hundreds of millions of people to the country.

It’s true that more workers, more consumers, and more government spending would make the economy bigger. But that larger GDP would be spread across more people, so each individual would not necessarily be better off. A better determinant of a country’s prosperity is per capita GDP. After all, if total GDP indicated a society’s wealth, then India would be considered richer than Sweden because its economy is much bigger.

It is far from clear that adding people is a key ingredient for raising per capita economic growth. If it were, we would expect that per capita economic growth in Canada and Australia — which have among the highest rates of immigration and resulting population growth in the industrialized world — would far outpace Japan, which has had relatively little immigration and a declining population. But between 2010 and 2019, Japan’s per capita GDP growth was actually slightly higher than Canada’s and Australia’s. In fact, over the last two decades, population growth was not correlated with per capita GDP in developed countries.

Productivity, not population growth, is the key to economic prosperity. In an often-cited meta-analysis, Derek D. Headey and Andrew Hodge found that population growth may actually slow economic growth, perhaps because adding workers reduces the incentive to innovate. Looking specifically at the decline in fertility in industrialized countries, a 2017 study by Ronald Lee and Andrew Mason found that “the effect of low fertility on the number of workers and taxpayers has been offset by greater human capital investment, enhancing the productivity of workers.”

At the same time that population-boosters overstate its benefits, they understate its costs. One need not accept the most dire predictions of environmentalists to acknowledge that population size has a direct bearing on everything from protecting habitat to reducing air pollution.

In addition to the environment, there are quality-of-life issues. A 2018 Gallup poll found that, by a margin of two to one, Americans want to live in areas of low or moderate population density rather than high density. Adding millions of people makes this more difficult. Population growth has implications for issues like traffic and congestion as well. As a Brookings Institution analysis once concluded, “The most obvious reason traffic congestion has increased everywhere is population growth.”

A larger population also means each vote counts less and has proportionately less influence. At the national level this may not matter so much, but at the state and local level, using immigration to make the population larger and more heterogeneous may worsen already historically low levels of trust in government and the feeling of so many that it is unresponsive.

If we are concerned about not having enough workers, there are far less radical and more effective ways to address the issue than immigration-induced population growth. First, we should try to address the long-term decline in labor-force participation. In the fourth quarter of 2021, only 73.6 percent of the working-age (16-64) population were “in the labor force”, meaning holding a job or at least looking for one. The rest — a near record 54 million — were out of the labor force entirely.

If the labor force participation rate merely returned to its 2000 level (76.9 percent), there would be nearly seven million more people in the job market. To put that number in perspective, the total number of immigrant workers (legal and illegal) has increased by 7.6 million since 2000. Getting more people back to work would not just be good for the economy, it would also be good for society, as unemployment is associated with social problems like crime and substance abuse.

We can also raise the retirement age. My own projections show that raising it by just one year increases the working-age share of the population by about as much as would all the immigration expected by the Census Bureau through 2050. And increasing the retirement age by three years would have the same effect on the working-age share as doubling immigration.

The aging of American society does require changes in public policy. But using immigration to add tens or even hundreds of millions of people to the country would almost certainly cause wide-ranging disruptions to our quality of life, and it is simply not necessary to keep our economy going.