By Zheli He and Austin Herrick
Introduction
In 2017, immigrants were about 13 percent of the U.S. population. So, it is not surprising that changing immigration policy has a notable impact on U.S. demographic trends. In this post, we project the impact of increasing and decreasing annual net legal immigration1 on the age distribution and education level of the U.S. population. Specifically, we project demographics under current policy relative to policies which decrease annual net legal immigration by 50 percent and increase annual net legal immigration by both 50 percent and 100 percent.
Population Size
Under current policy, we project that the U.S. population continues to increase over the next few decades, although at a declining rate. Figure 1 below shows the population growth path under current policy and under policies that increase and decrease annual net legal immigration.
Figure 2 shows the growth of immigrants2 as a share of the U.S. population. We project that under current policy, this share continues to grow, by an average of 0.76 percent annually between 2018 and 2048. This growth occurs even with no change to policy because new immigrants are younger than native-born Americans. Thus, we expect immigrants have more years to live. Intuitively, increasing/decreasing the annual net flow of immigrants increases/decreases the fraction of the U.S. population that is foreign born.
Impact on Educational Attainment
Increasing or decreasing annual net legal immigration affects the educational attainment of the U.S. population. Of legal immigrants who arrived since 2014, about half held a bachelor’s or advanced degree, compared to a third of native-born Americans.
In fact, recent immigrants are better-educated than ever before. We previously showed that in recent years, immigrants arrive to the U.S. from different countries than in the past. These new arrivals are more likely to immigrate from Asia compared to prior immigrants who were more likely to immigrate from Mexico or Central America. We project that the share of immigrants arriving by country is the same in future years as it is now. We also previously examined how these trends increased the educational attainment of recent immigrants.
Therefore, increasing or decreasing annual net legal immigration changes the composition of the immigrant population.3
Figure 3 shows that the share of the U.S. population with a bachelor’s or advanced degree increases under current policy.4 Policies that increase annual net legal immigration lead to faster growth in educational attainment because immigrants are more likely to have a bachelor’s or advanced degree.
Impact on Age Distribution
Newly arrived immigrants are generally of working age. Thus, the rate of immigration also affects the age distribution of the population, including the old-age dependency ratio5 and the child dependency ratio.6
As can be seen in Figure 4, increasing the rate of immigration increases the working age population relative to the retired age population because immigrants are younger than native-born citizens. Under current policy, in 2048, the old-age dependency ratio is 38 percent. If legal immigration is doubled, then, in 2048, this ratio is 35 percent. If legal immigration is halved, then, in 2048, this ratio is 40 percent.
Policies that lower the old-age dependency ratio, such as increasing legal immigration, are likely to improve federal finances which positively impacts private capital formation and economic growth. Pay-as-you-go old-age entitlement programs such as Social Security and Medicare accounted for about 45 percent7 of non-interest federal spending in 2018. Increasing/decreasing net legal immigration improves/worsens the finances of these programs because it increases the working-age population. Furthermore, qualifying for full benefits takes many years. In addition, while immigrants help pay for other federal spending, such as for defense, they do not generate additional significant costs for the military. Thus, immigrants somewhat reduce the federal tax burden of the average native-born American.
Figure 5 shows that legal immigrant flows have the opposite effect on the child dependency ratio because immigrants tend to have higher fertility rates than native-born Americans. Nonetheless, increasing the population of children leads to larger workforces in the future. In turn, a larger working-age population provides long-term reductions to the old-age dependency ratio. At the same time, increasing the population of children creates short-term costs, especially on state and local governments, to provide K-12 education and other programs. In the long run, however, this fiscal burden may be offset once the children of immigrants become taxpayers.
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Net immigration to the U.S. is currently about 800,000 people per year. ↩
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In PWBM’s Microsimulation (PWBMsim), an immigrant is defined as an individual living in the United States who was born abroad (not to U.S. citizen parents). Immigrants can be authorized, unauthorized, or naturalized. ↩
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Percent of U.S. Foreign-Born Population from Mexico Under Current Policy and Three Options for Annual Net Legal Immigration Policy, 2018-2048
Percent of U.S. Foreign-Born Population from Asia Under Current Policy and Three Options for Annual Net Legal Immigration Policy, 2018-2048
↩
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We project educational attainment increases for both the native-born and immigrant population. ↩
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Ratio of working age population (18 - 64) to people aged 65 or older. ↩
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Ratio of working age population (18 - 64) to people aged 17 or under. ↩
Year,Current Policy,Decrease by 50%,Increase by 50%,Increase by 100%
2018,323551404.4,323551404.4,323551404.4,323551404.4
2019,325986618.2,326002395.5,326033412.9,326030422.1
2020,328530184.7,327886963.7,329189881.7,329830532.8
2021,331073396.3,329848040.4,332388020.5,333676046.6
2022,333550366.2,331699380.1,335570291.1,337507230.1
2023,336030648.1,333546107.9,338810615.9,341400417.4
2024,338544287.5,335307695,342023203.8,345311198.5
2025,340998900.7,337112325.5,345210505.8,349251207.9
2026,343391175.7,338798350,348388519.1,353192068.6
2027,345793741.8,340395922.8,351461647.9,357082985.7
2028,348074115.4,341934251.7,354556192.3,360931195.4
2029,350340885.9,343388504.1,357580684.7,364753582
2030,352530058.8,344814257.9,360546219.8,368523896.8
2031,354606857.2,346144937.9,363432027.2,372292792.6
2032,356604165.5,347353227.9,366293064.9,375994151.2
2033,358543393.9,348488320.5,369126623.6,379707853.7
2034,360402540.8,349507290.4,371895548.7,383335006.3
2035,362227738.7,350447623.4,374584617,386911647.8
2036,363920453,351352954,377259236.4,390409117.4
2037,365535569.8,352152213.4,379851805.8,393954544.1
2038,367072024.5,352945796.7,382285306.9,397385469.5
2039,368569680.5,353615925.9,384690684,400791706.9
2040,370023924.3,354229531,387113735.3,404213267.8
2041,371454983.6,354758468.3,389468540.8,407599073.8
2042,372752494.7,355223195.2,391778064,410933942.9
2043,374060415.2,355661315.6,394090554.4,414276757.6
2044,375365733.4,356063960.7,396381758.3,417655753
2045,376611315.6,356405351.7,398635807.6,421027512.3
2046,377832057.2,356752655.3,400850767,424366070.5
2047,379051261,357070869.1,403123135.6,427778267
2048,380289745.9,357433663.5,405391375.8,431169038.9
Year,Current Policy,Decrease by 50%,Increase by 50%,Increase by 100%
2018,0.141477195,0.141477195,0.141477195,0.141477195
2019,0.143055801,0.143037236,0.143112398,0.143182193
2020,0.144697578,0.143073789,0.146476907,0.148074203
2021,0.146254977,0.143138764,0.149683027,0.152842451
2022,0.147857932,0.143217886,0.152750694,0.157538589
2023,0.149410778,0.143314065,0.15583644,0.162088608
2024,0.150902121,0.143311218,0.1589083,0.166579713
2025,0.152329721,0.143354653,0.161801072,0.170912842
2026,0.15370372,0.143409412,0.164607908,0.175186635
2027,0.155125552,0.143387295,0.167344609,0.179266058
2028,0.156477432,0.143393327,0.170106912,0.183227745
2029,0.157808771,0.143396865,0.172671659,0.187091099
2030,0.159105594,0.14333883,0.175318663,0.190828166
2031,0.160428933,0.143340767,0.177868182,0.194549354
2032,0.161665701,0.143297514,0.180377059,0.198159137
2033,0.162888214,0.14331314,0.182785178,0.201655732
2034,0.164125433,0.143281532,0.185168342,0.205192383
2035,0.16536458,0.143254232,0.187550088,0.208638292
2036,0.166577289,0.143268602,0.189818642,0.211914378
2037,0.16767516,0.143203809,0.192133451,0.215153977
2038,0.168787863,0.143108776,0.194328082,0.218337696
2039,0.16990352,0.142994856,0.196514691,0.221475962
2040,0.170971207,0.142911502,0.198626723,0.22455141
2041,0.172001857,0.142767177,0.200659232,0.227633152
2042,0.172995294,0.142596122,0.202617978,0.230490402
2043,0.173910239,0.142401254,0.204610822,0.233246141
2044,0.174802697,0.142177522,0.206506568,0.235998455
2045,0.17564698,0.141951476,0.208329085,0.238608926
2046,0.176421299,0.141622418,0.210066969,0.241204825
2047,0.177193227,0.141321733,0.211788855,0.243784872
2048,0.177889847,0.140962317,0.213380003,0.246147777
Year,Current Policy,Decrease by 50%,Increase by 50%,Increase by 100%
2018,0.349839061,0.349839061,0.349839061,0.349839061
2019,0.352692413,0.352601043,0.352715513,0.352581073
2020,0.355212802,0.354955069,0.355555325,0.355901707
2021,0.358419029,0.357788363,0.358880825,0.359594729
2022,0.360805541,0.359888554,0.361657719,0.362771346
2023,0.363508134,0.362283359,0.36456774,0.36611371
2024,0.366636213,0.365157157,0.367854029,0.369701312
2025,0.369556385,0.367777228,0.371149545,0.373462224
2026,0.372604505,0.370428767,0.374497126,0.377159989
2027,0.375601739,0.373132587,0.377874403,0.380666722
2028,0.378472744,0.37563032,0.381185267,0.384157242
2029,0.381442271,0.3782926,0.384271479,0.387479846
2030,0.384178989,0.380658775,0.387151254,0.390574245
2031,0.386594232,0.382717817,0.389889083,0.393564645
2032,0.388863257,0.384773481,0.392321923,0.396477788
2033,0.390925685,0.386799189,0.394717414,0.399121404
2034,0.393110792,0.388787902,0.397020685,0.401773247
2035,0.395815487,0.391351159,0.399983676,0.404941754
2036,0.398509284,0.393662166,0.402877942,0.408075709
2037,0.40115046,0.396038624,0.405745477,0.411167198
2038,0.403884088,0.398485968,0.408737913,0.414377372
2039,0.4065029,0.400844239,0.411522096,0.417481707
2040,0.409230586,0.403371342,0.414498296,0.42067249
2041,0.412018172,0.406005384,0.417462446,0.423824107
2042,0.414824657,0.408536371,0.420305519,0.426877869
2043,0.41749849,0.411142833,0.423052596,0.429984157
2044,0.420026653,0.413589021,0.425921955,0.432900667
2045,0.422486991,0.415995666,0.428530526,0.435886464
2046,0.424910944,0.418207659,0.431094709,0.438527217
2047,0.427213452,0.420412988,0.433598979,0.441215675
2048,0.429492667,0.422533702,0.436081541,0.443757477
Year,Current Policy,Decrease by 50%,Increase by 50%,Increase by 100%
2018,0.257391722,0.257391722,0.257391722,0.257391722
2019,0.265638482,0.26572071,0.265652794,0.265668509
2020,0.274708654,0.274830371,0.273785351,0.273630265
2021,0.284055819,0.2843939,0.282406278,0.281944589
2022,0.293287265,0.293850463,0.290771605,0.289854927
2023,0.302454084,0.303662321,0.299466554,0.297675341
2024,0.311358181,0.313092874,0.307444351,0.304821773
2025,0.319353976,0.322158062,0.314835481,0.311958827
2026,0.327900607,0.331505719,0.322561214,0.319010776
2027,0.335469167,0.340034995,0.329322285,0.325192129
2028,0.342355791,0.348151811,0.335865162,0.330524122
2029,0.349679438,0.355952334,0.342274461,0.336006278
2030,0.356271568,0.363430604,0.34832934,0.341179042
2031,0.360907322,0.369097784,0.352044781,0.344327822
2032,0.364641264,0.374021424,0.355230378,0.347048477
2033,0.368639518,0.378552148,0.358289406,0.349744462
2034,0.371853586,0.382954098,0.361104515,0.352089517
2035,0.376081155,0.387836591,0.364373466,0.354792848
2036,0.378751491,0.391433193,0.366264514,0.356158597
2037,0.380615611,0.394220608,0.367556372,0.356988117
2038,0.381003559,0.395838265,0.367538952,0.356330973
2039,0.381003261,0.396381741,0.367111206,0.355302274
2040,0.380821879,0.396871978,0.366335882,0.353929048
2041,0.380071159,0.396519771,0.364986411,0.352181892
2042,0.379349368,0.396354388,0.364039157,0.350573229
2043,0.37860501,0.396195541,0.362911726,0.348973839
2044,0.378201792,0.395935183,0.361835945,0.347650895
2045,0.379445059,0.398302794,0.362638316,0.347750706
2046,0.38009357,0.399357606,0.362421104,0.347418269
2047,0.380416531,0.400641229,0.362560234,0.346981795
2048,0.381053485,0.402222805,0.362773907,0.346900622
Year,Current Policy,Decrease by 50%,Increase by 50%,Increase by 100%
2018,0.373266936,0.373266936,0.373266936,0.373266936
2019,0.370629146,0.370602527,0.37038135,0.370804373
2020,0.369645895,0.369438814,0.368996306,0.369130508
2021,0.368818114,0.369215122,0.368302817,0.368307288
2022,0.368729914,0.369285808,0.368379421,0.367535495
2023,0.36823665,0.369217847,0.368006646,0.366997747
2024,0.368152818,0.369046955,0.368012212,0.366599605
2025,0.367394681,0.368461534,0.367122462,0.365761577
2026,0.366871082,0.367820872,0.366435606,0.365331845
2027,0.367033617,0.367436073,0.366309215,0.365036879
2028,0.36694394,0.36688594,0.366399026,0.364756319
2029,0.367614436,0.367220223,0.367127178,0.365418726
2030,0.368110856,0.367347598,0.367621521,0.36601793
2031,0.368827332,0.367545437,0.36832826,0.367040352
2032,0.369715384,0.367883131,0.36901947,0.368453804
2033,0.372371879,0.370472515,0.372374247,0.371618777
2034,0.373288005,0.370937107,0.373865141,0.372912512
2035,0.374126272,0.371620799,0.374863954,0.37418043
2036,0.374380736,0.371556255,0.375261406,0.374981048
2037,0.374007374,0.370683537,0.375317472,0.375304713
2038,0.372510235,0.369276,0.374181477,0.374527604
2039,0.370732893,0.367341653,0.372773103,0.37340612
2040,0.369141085,0.365584225,0.370938719,0.372554287
2041,0.367146205,0.363176767,0.368903912,0.370820184
2042,0.36482024,0.360811739,0.366983466,0.368901848
2043,0.362484102,0.358515436,0.36513277,0.366956513
2044,0.360442269,0.356409159,0.363270855,0.36536374
2045,0.358599999,0.354688515,0.361680847,0.363996876
2046,0.356548072,0.353046246,0.359680131,0.36259727
2047,0.354815027,0.351436946,0.358015705,0.361154583
2048,0.353229936,0.349973726,0.356870557,0.360025158
Year,Current Policy,Decrease by 50%,Increase by 50%,Increase by 100%
2018,0.269411324,0.269411324,0.269411324,0.269411324
2019,0.264390088,0.264633149,0.264390954,0.264297354
2020,0.259964244,0.2623938,0.257491808,0.255851251
2021,0.255531936,0.260113501,0.251317547,0.24793335
2022,0.251484962,0.257677756,0.245675942,0.240568349
2023,0.247598721,0.255612657,0.240330644,0.233980896
2024,0.243925653,0.253409069,0.235413017,0.227762699
2025,0.240207664,0.251254967,0.230482012,0.221802437
2026,0.236574637,0.249058778,0.22615209,0.216489103
2027,0.233226114,0.247009203,0.221831502,0.211576235
2028,0.230086069,0.245040515,0.217514244,0.206956356
2029,0.226992505,0.242916322,0.21371572,0.202335188
2030,0.223824385,0.241016688,0.209841465,0.198103625
2031,0.220752723,0.239129352,0.206200702,0.194161334
2032,0.217633047,0.237190065,0.202462394,0.190445016
2033,0.214836005,0.235191352,0.199342611,0.187064886
2034,0.212259849,0.233141495,0.196148026,0.183548694
2035,0.209529405,0.231054823,0.193218361,0.180315797
2036,0.206820602,0.229060602,0.190512205,0.177287839
2037,0.204105588,0.227249552,0.187663265,0.174398863
2038,0.201569015,0.225387751,0.185161889,0.17168188
2039,0.199040188,0.223485218,0.182583477,0.169258592
2040,0.196672588,0.221538381,0.179950581,0.166676057
2041,0.194410169,0.219512269,0.177368762,0.164133855
2042,0.192012973,0.217734867,0.174761039,0.161639129
2043,0.189543493,0.215927645,0.172266453,0.159461527
2044,0.187150647,0.213671939,0.170031179,0.15730995
2045,0.184942173,0.211631376,0.167572444,0.155288886
2046,0.182531219,0.209696295,0.165391887,0.153246233
2047,0.180308661,0.207617914,0.163167014,0.151255315
2048,0.177950859,0.205328163,0.161175046,0.149425253
Year,Current Policy,Decrease by 50%,Increase by 50%,Increase by 100%
2018,0.270706395,0.270706395,0.270706395,0.270706395
2019,0.274933507,0.274940594,0.274881339,0.275019499
2020,0.279012509,0.277358852,0.280409077,0.281741316
2021,0.282890193,0.279405466,0.285021844,0.28796222
2022,0.286457226,0.281467965,0.289500824,0.293928867
2023,0.289756606,0.28371107,0.294232086,0.298869765
2024,0.292631786,0.285707032,0.298506942,0.303870959
2025,0.295551696,0.287558902,0.302562293,0.308503331
2026,0.29860092,0.290001315,0.30627529,0.312530629
2027,0.301249926,0.292072075,0.309555156,0.316462097
2028,0.304046923,0.294129743,0.312730004,0.320355885
2029,0.306634185,0.296179723,0.315994551,0.323827935
2030,0.309258982,0.298289689,0.318927352,0.327654509
2031,0.312049836,0.300157787,0.321997613,0.330728131
2032,0.314539229,0.302466748,0.324413533,0.333635969
2033,0.317209744,0.304368352,0.327177002,0.336289181
2034,0.319694915,0.306428275,0.329582331,0.33901907
2035,0.321731856,0.308483725,0.331786004,0.341699498
2036,0.323975267,0.31014977,0.333982355,0.34394423
2037,0.326075523,0.311577886,0.336062228,0.346191285
2038,0.327962218,0.313253551,0.338223169,0.348366979
2039,0.32955377,0.31507524,0.339982865,0.350317642
2040,0.331263873,0.316759669,0.342369665,0.352182959
2041,0.3331119,0.318535425,0.344471327,0.353913496
2042,0.334788482,0.320546077,0.346596324,0.355861297
2043,0.336619835,0.322210867,0.348531633,0.357972253
2044,0.338460337,0.324095163,0.350198884,0.359577321
2045,0.340334486,0.325744782,0.35201877,0.361068359
2046,0.342453291,0.327468103,0.353658591,0.362665303
2047,0.344281135,0.329411179,0.355197563,0.364152205
2048,0.345818823,0.331274657,0.356797223,0.365517632